Property News

London’s top commuter towns revealed

February 21, 2019

With a growing number of Londoners renting property outside the capital, where affordability is stretched, more buy-to-let landlords are now looking beyond the confines of London when investing in property, but what are the best commuter towns for those working in the city?

By ranking commuter towns based on average house prices, length of a train journey into the capital, cost of a season ticket, and the commuter town’s ONS lifestyle rating, TotallyMoney has identified Cheshunt in Hertfordshire as the number one town this year.

Located around 26 minutes away from the city centre, a season ticket here - which stands at £2,288 - is the fifth cheapest of the 116 towns analysed as part of this study.

For any buy-to-let investor thinking of buying property Chesthunt, the average price of a residential property here is currently £384,248.

According to TotallyMoney, the level of life satisfaction is ranked at 7.92, which is the same as Waltham Cross, also located in Hertfordshire, which ranked in second place.

Commuters in Waltham Cross can expect to pay £2,028 for a season ticket, and travel for around 28 minutes.

But property prices here are slightly more expensive at an average of £390,612.

High Wycombe, Buckinghamshire, ranks in third place.

The average journey time into London is 30 minutes from High Wycombe, while the average property price is £331,092.

Hatfield in Hertfordshire, Gravesend in Kent, and Broxbourne in Hertfordshire also feature in the top 10 commuter towns, along with Watford Junction, Hertfordshire, Basingstoke and Overton in Hampshire, and Hemel Hempstead in Hertfordshire.

Rank

Town

County

Journey Time to London

House Price

Season Ticket

Satisfaction

1

Cheshunt

Hertfordshire

26

£384,248

£2,288

7.92

2

Waltham Cross

Hertfordshire

28

£390,612

£2,028

7.92

3

High Wycombe

Buckinghamshire

30

£331,092

£3,668

7.95

4

Hatfield

Hertfordshire

25

£344,459

£2,808

7.83

5

Gravesend

Kent

23

£284,497

£3,616

7.76

6

Broxbourne

Hertfordshire

32

£408,915

£2,848

7.92

7

Watford Junction

Hertfordshire

19

£416,680

£3,204

7.76

8

Basingstoke

Hampshire

44

£320,082

£4,604

8.09

9

Overton

Hampshire

55

£215,395

£4,740

8.09

10

Hemel Hempstead

Hertfordshire

26

£361,817

£3,832

7.79

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Top tips to help protect yourself against property investment fraud

February 21, 2019

Many people invest in property or sign up to investment club arrangements, which are not uncommon in the industry, but sometimes it turns out that they are based on fraudulent origination or closing practices.

Research shows that property fraud in this country is on the rise with the cost of attempted property fraud amounting to more than £130m last year, and so potential property investors, incluidng buy-to-let landlords, naturally need to be extremely vigilant about fraudulent investment property schemes.

To help protect against property investment fraud, Alexandra Morris, managing director of MakeUrMove, offers the following tips:

Do your research

Many landlords look to property investment as a way to save extra funds for retirement. Although pension cold-calling has recently been banned, you could still be contacted by companies about property investment opportunities.

If a company does contact you out of the blue, before you agree to anything, you should do some research into the company. Not only that, but dig down into the investment opportunities they are offering. Through searching online, you’ll be able to easily and quickly identify whether these companies already have a reputation for scamming people.

Be aware of land banking

The UK is currently seeing a strong increase in the number of Build to Rent homes under construction. It’s not just in London either, as Build to Rent homes are also springing up across the whole of UK.

Build to Rent homes can be seen as an attractive investment, as they are built specifically with tenants in mind, featuring communal areas to create a real tenant community, onsite maintenance teams, and located close to city centres and public transport.

However, there is the risk of the build to rent land being ‘land banked’. You may be told that if you invest a large amount into a small plot of land now, its value could increase with planning permission. However, you may find that you have paid an inflated price or you may not be able to have planning permission granted due to it being in an area of natural beauty.

Not all land banking is necessarily a scam, but you need to make sure that you know any restrictions associated with developing the plot of land you are buying before you hand over any money.

Sign up to Property Alert

Properties that are not registered with the Land Registry are said to be more vulnerable to fraud.

The HM Land Registry has a handy and free Property Alert service which can help you feel more secure if you think your property could be at risk from fraud.

 

 

 

Once you are signed up to the Property Alert service, you can monitor your property and get email alerts when any activity associated with your property occurs. For example, if a mortgage lender does a search on your property, but you haven’t been in talks with them, this may be classed as suspicious activity. This allows you to swiftly take action.

Protecting yourself from property investment fraud

The most important thing to remember is that if something seems too good to be true, it probably is.

If you think you’ve been the victim of a property investment fraud, you should contact Action Fraud immediately. They will be able to provide the best advice for next steps.

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Are you prepared for the next phase of mortgage interest tax relief changes?

February 21, 2019

On the surface, registering as a limited company could serve higher taxpayers and larger investors well, while mainstream lenders remain a suitable option for independent landlords. However, with different lenders posing differing criteria - dependent on a number of factors - there isn’t a blanket solution.  

To best navigate the changes to mortgage interest relief, it is important for all landlords to do their homework before the full extent of the mortgage interest deduction is implemented from April 2020. To that end, in addition to finding the right lender with the best rate, landlords should consider this in conjunction with their return on investment to determine the most financially viable solution.

The gradual phasing of this legislative change has meant that, year on year, landlords have had little consistency when it comes to their finances, which can cause concern. However, we’re confident that we can support clients as they adapt to this ever-changing landscape and, for those who are unsure, seeking professional advice should be the first port of call.

Credit: Mike Perrin / Private Finance

Lisa Simon is the head of residential sales at Carter Jonas.

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CMP scheme allows landlords and tenants to claim money back from rogue agents

February 21, 2019

Landlords and tenants will continue to be able to claim back the entire amount of money that has been lost or misappropriated by an agent, as has been the case since January 2018 in the UKALA scheme, after the association for letting agents secured approved status for its client money protection (CML) scheme.

The approval secured by the Secretary of State means that UKALA is now able to offer the industry-first total loss CMP scheme to its members. In some other schemes the amount you can claim is capped, but it is not clear if this will remain the case moving forward.

This exclusive benefit for UKALA members and their clients, facilitated by UKALA with the support of Let Alliance, comes ahead of a number of changes for the private rented sector, including the government being expected to make CMP mandatory for letting agents from 1st April 2019

With billions of pounds worth of landlords’ and tenants’ money handled by letting agents, the total loss CMP launched just over a year ago, is seen as an important milestone in the industry, and is now recognised by the English government.

Underwritten by A-rated insurers Hiscox, the UKALA total loss CMP is regulated by the Financial Conduct Authority in the UK.

The Total Loss CMP scheme is open to all property agents and professionals who can become members via the straightforward application process.

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Skipton’s UK buy-to-let mortgages are now available to overseas nationals

February 21, 2019

Skipton International has extended its UK buy-to-let mortgages to foreign nationals based abroad.

Skipton previously only offered its UK buy-to-let mortgages to British expatriates but its decision to offer its products to overseas nationals is designed to increase its customer base, and strengthen its position as a mortgage provider.

Applications will be restricted to clients living in Skipton Internationals’ approved list of countries.

To qualify, borrowers will need to have a UK bank account in place to service the mortgage repayments and collect rental income.

Skipton’s decision to offer mortgages to foreign nationals is the latest in a range of changes by the lender.

Skipton International, which launched its expatriate mortgage in Scotland last year, recently extended the terms of its mortgage proposition to include studio apartments valued at £250,000 and above.

Roger Hughes, business development manager at Skipton International, commented: “This is tremendous news for Skipton International. We have been continually refining our UK buy-to-let offering and will continue to search out ways in which we can make our products more readily available and inclusive.

“This development considerably widens the pool of clients to whom we can now offer lending and makes us one of the most competitive players in the UK buy-to-let market for overseas residents as there are only a few lenders that can offer UK buy-to-let mortgages to non-UK nationals.

“Growing our expat mortgage business will continue to remain a strong focus for Skipton International.”

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Buy-to-let lending slumps as landlords deterred by tax changes

February 20, 2019

Buy-to-let mortgage activity continued to slow in December with landlord investors taking out just 5,100 new buy-to-let home purchase mortgages, down 5.6% on the corresponding month in 2017, data from UK Finance shows.

According to the industry body, the total value of buy-to-let loans dropped by 12.5% to £700m, as fewer buy-to-let investors actively look 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.

In 2018, there were 66,400 new buy-to-let home purchases completed, some 11.5% less than in 2017. The £9bn of new lending in the year was 15% less than in 2017.

Simon Heawood, CEO and co-founder of Bricklane.com, said: “Landlords are feeling the effects of being in HMRC’s crosshairs as the government continues to target buy-to-let.

“It’s no surprise that many private landlords are considering abandoning the sector as the costs begin to genuinely outweigh the benefits.”

To help 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, according to Matt Andrews, managing director of mortgages at specialist lender Masthaven.

He commented: “From tax alterations to regulatory updates, it seems the sector is really feeling the effects of these changes. In order to keep the market attractive to BTL investors and to avoid further market uncertainty, greater incentives and lending products will be paramount.”

Meanwhile, there were 12,400 new buy-to-let remortgages completed in December, , some 25.3% more than in the same month a year earlier. By value this was £2bn of lending in the month, up 25% year-on-year.

In 2018, there were 169,100 new buy-to-let remortgages completed, some 11.2% more than in 2017. The £27bn of new lending in the year was 11.6% more than in 2017.

Paul Smith, CEO of haart estate agents, said: “Whilst it is disappointing to see further drops to buy-to-let purchasing, it is encouraging to see buy-to-let remortaging reach a record high as a number of landlords keep faith in the market.”

He added: “Now is the time to act whilst mortgage rates stay at rock bottom as landlords can lock themselves into a great deal.”

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It’s time to tackle the scourge of sub-standard rental homes, says PayProp chief

February 20, 2019

Tenants living in sub-standard rented accommodation need greater support, according to Neil Cobbold, chief operating officer of PayProp UK, who has welcomed the government’s ongoing review of the housing health and safety rating system (HHSRS).

The leading PropTech supplier believes that the ongoing review, which was initially announced in October 2018 by the Ministry of Housing, Communities and Local Government (MHCLG), is happening at a ‘pertinent time’ for the lettings industry, with the most recent English Housing Survey, published last month, revealing that the PRS accounts for the highest proportion of non-decent homes at 25%.

Under consideration is whether the system needs updating and whether to introduce minimum standards for common health and safety problems in rental accommodation.

For a home to be considered ‘decent’, it must meet the HHSRS minimum standard, which was introduced in 2006, under the Housing Act 2004, designed to provide local authorities with the means to check health and safety in residential properties. Councils can use the HHSRS to recover costs from landlords for repair works or order them to carry out improvements.

The property must also contain no category 1 hazards, alongside several other criteria.

But the English Housing Survey shows that in 2017, 14% of PRS homes had a category 1 hazard, although this is down from 31% in 2008.

Cobbold commented: “With the PRS accounting for the highest proportion of non-decent homes, the review of the HHSRS will be important in determining if criteria need to be tightened in order to reduce the number of sub-standard rental homes.

“It's pleasing to see that the number of rental homes with serious hazards is declining, but that is another reason why the HHSRS needs updating.

“As newer homes enter the sector and energy efficiency continues to improve, there could be entirely different health and safety issues which now merit closer attention.”

An updated HHSRS is further essential for the PRS due to the significant change the market has undergone since the system was first introduced, according to Cobbold.

He makes reference to the English Housing Survey that shows that in the last decade, the number of households with dependent children in the PRS has increased by 795,000. Meanwhile, during the same period, the number of 35-44-year-olds privately renting more than doubled from 13% to 28%.

He continued: “As well as changing demographics, which have an impact on property standards, the sector has become much larger since 2006, now accounting for around a fifth of all households.

“This means more tenants need protection from rogue landlords with increased opportunities to let sub-standard homes.

“Moreover, the introduction this year of the Homes (Fitness for Human Habitation) Act 2018 - which will give tenants the opportunity to take legal action against landlords letting hazardous homes - means that a HHSRS which reflects the current market is vital.

“This will help landlords and letting agents to meet their compliance obligations, while offering the required protection for the nation's renters.”

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‘Positive news’ for landlords and tenants as new CMP scheme is approved

February 20, 2019

Client Money Protect, part of the Hamilton Fraser group, has been awarded consent to operate a client money protection scheme when the regulations go live on April 1st 2019.  

From the start of April, it will become mandatory for all letting agents and property managers in England to be a member of an approved client money protection scheme or face fines and sanctions for non-compliance.

Client Money Protect will offer a scheme that is fully compliant with the regulations and will feature no inner limits or annual aggregate claim caps meaning every customer of the agent, including buy-to-let landlords, will be fully protected should the worse happen and every member of the scheme will have all their client money covered. 

Missing deposits that are not protected by an authorised tenancy deposit protection scheme will also be covered by the scheme, aimed at small to medium sized operators, as will bank failure up to a certain level. 

Eddie Hooker, CEO of Hamilton Fraser commented: “In an increasingly regulated industry in which landlords are feeling the strain, this [approval of the CMP scheme] will offer some positive news in landlords’ and tenants’ favour.  Tenants’ deposits will remain covered by the deposit protection schemes, but CMP will act as a backstop should there be an issue.”

Paul Shamplina, founder of Landlord Action and brand ambassador for Hamilton Fraser, added: “Having dealt with too many cases where landlords and tenants have fallen victim to rogue letting agents who have misappropriated their money, I have long championed this move for our industry. 

“However, the challenge of educating consumers to understand the importance of ensuring their agent holds CMP will continue, but hopefully this will raise awareness and standards.”

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New tech solution to help sharers set-up and manage household bills

February 20, 2019

A new tech solution called Resooma Bills has been launched this morning to help make it easier for those living in shared accommodation to manage the setting up and splitting of their household bills.

With rental prices across many parts of the country continuing to grow, an increasing number of young professionals and new graduates are finding they are unable to afford the luxury of renting a flat or house for themselves. This presents lucrative opportunities for buy-to-let landlords who are able to provide properties suitable for a group of house-sharers, but this can often lead to problems among tenants when it comes to splitting household bills.

Many landlords will be hoping that the new tech platform will allow more renters, including students, to manage household bills, which can be one of the major causes of household arguments in shared accommodation, allowing for a smooth tenancy.

Jack Jenkins, co-founder and CEO of Resooma, commented: “We’ve always wanted to be about more than just helping people find homes. For us, it’s about solving all the problems that students and ‘Generation Rent’ face during the journey of renting their new place. Household bills is definitely one of them.”

In a survey carried out by Resooma, more than a third of respondents said that household arguments are put down to the stress caused trying to sort out their bills.

Each tenant that uses the new platform will receive just one bill at the end of each month, which will include their share of all the houses utilities, helping people set-up, manage and split their household bills between themselves.

Dan Jefferys, founder and COO of Resooma, said: “The new feature will make household billing easier by condensing utilities into one monthly bill and splitting it equally between all housemates.

“Through our in depth research into the student market, we understand that household bills are the number one cause of argument in the home. It therefore becomes a must for us to fix this.”

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Tenant demand increases in London as number of properties for rent falls

February 20, 2019

Demand from new tenants in London’s private rented sector is rising at a time when the number of homes available to rent is falling, new figures show.

The latest annual London Letting Report from Foxtons reveals that the number of new prospective tenants registered per new rental listing in 2018 increased to almost nine, with close to 175,000 tenants registered with the firm last year - the highest ever level.

The data reveals that the supply of available properties moved in the opposite direction to demand, with the number of properties available to rent at the end of 2018 dropping by 13% compared with the corresponding period the previous year.

Sarah Tonkinson, director of institutional PRs and Build to Rent, said: “We saw an increase in the number of renter registrations over the course of 2018 compared to 2017.”

London as a whole saw an 8% increase in tenant registrations, led by Zone 2 which saw the biggest rise with a 13% jump in demand, according to Foxtons.

Overall the stock of properties fell with 11% less properties coming to market over the same period as 2017. With demand outstripping supply, this provides a potential benefit to new and existing landlords.

Tonkinson added: “The numbers were particularly good for Q4 which is traditionally a slower market. That coupled with less available stock is good news for landlords for the start of 2019.”

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Brexit uncertainty continues to weigh heavily on the housing market

February 19, 2019

Confidence in the UK housing market has slumped amid Brexit uncertainty, according to Paragon’s latest Financial Adviser and Confidence Tracking (FACT) Index, a regular survey of over 200 UK mortgage intermediaries. 

Mortgage advisers predict that property price growth will remain subdued, while they expect buyer demand to remain virtually unchanged in the first quarter of 2019, as political and economic uncertainty adversely affects the market.

Reflecting on the second half of 2018, more than half - 57% - of mortgage advisers felt that Brexit had a negative impact on demand for properties, 56% said it had placed downward pressure on property prices and 44% reported a dampening effect on the availability of property.

In contrast, just 5% highlighted a positive impact against any of these factors.

John Heron, managing director of mortgages at Paragon, commented: “Brexit uncertainty is causing a measurable slowdown across the UK housing market as potential buyers and sellers adopt a ‘wait and see’ approach.

“As political negotiations move into the final phase, hopes are high for a workable solution and a much-anticipated Brexit bounce.”

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Landlords accused of ‘exploiting’ student renters

February 19, 2019

Landlords are taking advantage of first-time student renters by failing to carry out repairs, according to a new poll.

A fresh report by the National Union of Students (NUS) reveals that students are finding renting difficult, in terms of affordability, poor conditions, and a lack of bargaining power with landlords.

More than a third of students have reported feeling anxious or depressed due to “appalling” living conditions and “exploitative” landlords, while the NUS report also suggests that around 20% of students have to deal with pests in their rented accommodation and almost half are living with damp and mould growing in their homes.

The NUS also found that 17% of students surveyed said their living conditions had worsened existing health conditions, while 12% believed they had developed a new health problem.

According to the NUS, around half of students spend more than 75% of their monthly income on housing costs, while almost half of student renters had not been provided with paperwork to prove their tenancy deposit is secured in a tenancy deposit scheme. 

The NUS is now calling for the government to force landlords to improve standards for student renters.

Eva Crossan Jory, vice president of welfare for NUS, said: “Students are living in appalling circumstances, in some of the worst housing stock in the country.

“For too long, they have been taken advantage of by bad landlords who rely on students not knowing their rights, or what to expect, when they rent their first home.

“Living in damp and dangerous properties is not a right of passage for students coming to college or university.”

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Plans approved for major Build to Rent scheme in Cardiff

February 19, 2019

PLATFORM_ has been awarded planning consent to build just over 200 homes on the site of the former Browning Jones & Morris builders’ merchants premises on Dumballs Road in central Cardiff.

The project will feature a mixture of one- and two-bedroom flats, along with a residents’ lounge, gym and communal roof terraces.

The scheme, which is set to get underway during the second quarter of the year and take two years to complete, will also include a new public square between the three apartment blocks.

The new project, located 300m from Cardiff Central Station and near the major Central Square regeneration scheme, is PLATFORM_’s third approved Build to Rent scheme, after consent was also secured for projects in Glasgow and Sheffield, which means that the developer will soon have more than 1,000 new homes under construction.

Stewart Knight, acquisitions director at PLATFORM_, commented: “There is real momentum behind Cardiff and we look forward to getting on-site and delivering over 200 high quality homes for rent there.

“The site fits perfectly within our acquisitions strategy, being close to the railway station, city centre retail and established offices within a vibrant and growing city.

“We’re actively seeking more sites, looking for opportunities to deliver 200 plus homes in major towns and cities across the UK, and we are more than willing to work with local partners.”

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Landlord fined almost £3k for overcrowded flat

February 19, 2019

A buy-to-let landlord who crammed at least seven people into a two-bedroom flat has been ordered to pay almost £3,000 by a court.

Saleem Hakim was successfully prosecuted by Hull City Council after she allowed people to live in overcrowded conditions at a flat in Albany Street, Hull, HU3.

Officers from Hull City Council found at least seven people living in a two-bedroom flat owned by Hakim when they first visited the property in August 2017.

The landlord was issued with a suspended prohibition order by the council, giving her time to comply with the regulations but, after a couple more visits, the officers found that the flat was still overcrowded, leaving the council with little alternative but to take Hakim to court.

Hull Magistrates' Court found Hakim guilty of two offences of failing to comply with a suspended prohibition order in his absence and was charged £2,825 in council costs, fine and a victim surcharge for failure to reduce occupancy levels at the flat.

Cllr John Black, portfolio holder for housing at Hull City Council, commented: “Anybody taking on the role of landlord needs to be fully aware of their responsibilities under the law.

“The council has a duty to protect private sector tenants in poorly maintained properties and this proves that we take our role seriously.

“We tried to work with the landlord to reach a satisfactory conclusion but the actions required to make the property safe remained uncompleted.

“I hope this prosecution will send out a message to landlords that they need to act within the law or face the consequences.”

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Hanley launches new two-year fix at 1.84%

February 19, 2019

Hanley Economic Building Society has introduced a fee-free two-year fixed rate buy-to-let product at 60% loan-to-value with a borrowing rate of 1.84%.

Buy-to-let investors looking to take advantage of this deal, available for purchase or on a remortgage basis, will find that they can borrow up to £500,000, with no application or product fees on this deal.

Borrowers can make overpayments of up to 10% of the mortgage balance each society year until 30 April 2021, with any additional overpayments above 10% during this period attracting a penalty calculated on the amount of the additional payment.

If this mortgage is repaid in full before 30 April 2021 an early repayment charge of 2% of the balance will apply.

David Lownds, head of marketing and business development at Hanley Economic Building Society, said: “Despite facing some challenging times, the buy-to-let sector remains a competitive, innovative and robust sector of the mortgage market.

“Landlords, investors and intermediaries need all the support they can during the current political and economic climate, and we feel this product will provide a strong option for those looking to purchase and/or remortgage existing properties.”

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Rental decline showing signs of bottoming out in prime London: Savills

February 18, 2019

Rental values in prime London has started to see some slowdown in decline as initial signs of a bottoming out have begun to appear, according to Savills.

The international property consultants report that rents in 2018 declined by 0.8%, with cheaper properties significantly outperforming more expensive ones. 

Price sensitivity in the market is a major factor, with properties renting for up to £500 per week having seen five-year price growth of 6.6%, compared to a -19.5% drop for those over £3,000 per week.

Rents have fallen by an average -9.6% across the capital’s prime markets since the EU Referendum in June 2016, but with falls slowing, Savills forecasts that rents will rise moving forward, although growth is expected to be curbed in the short-term due to continued economic and political uncertainty.

Savills predicts that rents will rise by an average of 11.5% over the next five years, and by 12.6% across the prime commuter zone.

The prime rental markets of London’s commuter belt has seen robust demand for smaller properties, with rents for one- or two-bedroom properties have recorded double digit growth over the past five years.

Uncertainty in the financial services sector and constraints on corporate budgets continue to impact demand, both in London and its commuter belt, where around 70% of tenants are employed in London, but Savills points to broader underlying trends.

Lucian Cook, Savills head of residential research, said: “We are seeing footloose, cost-conscious tenants drawn to prime areas that offer greater value, rather than confining their search to premium addresses, and there’s a deeper seam of demand for smaller properties driven by needs-based younger tenants.”

The outlook for rents will be determined largely by stock levels, and Savills notes that accidental landlords could withdraw from the market as the sales market improves, as could buy-to-let landlords with debt as restricted tax relief on interest payments bites into their returns.

“But that doesn’t mean we can anticipate falling rental supply,” said Cook.  “Instead, we expect cash investors to become increasingly dominant, especially in central London, while history suggests international investors will become more active as uncertainty clears, particularly if they can play the currency card.  Stock levels also look set to rise as the number of new build homes completing increases.”

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Landlord handed suspended sentence for illegally evicting tenant

February 18, 2019

A buy-to-let landlord in Leeds who left his tenant homeless after changing the locks while he was on holiday has been handed a suspended jail sentence for carrying out an illegal eviction.

Leeds Magistrate’s Court heard that the tenant was left with no alternative but to sleep in a tent on a campsite for three months without access to crucial belongings following the eviction, leaving him unable to work.

The landlord, Christopher Saville, sent text messages to his now former tenant asking if he intended to continue living at the property, a rented flat above a fish and chip shop at 9 Coldcotes Circus, Gipton, LS8, after acquiring the property a month earlier with the sitting tenant, who had recently signed a 12 month fixed term tenancy.

Having failed to respond to the text message, the tenant, a self-employed DJ, found when he returned from holiday that the external gate to the tented property had been padlocked and the entrance door to the flat had been locked from the inside, leaving him with nowhere to live and without access to personal belongings including his DJ equipment.

Given the nature of his pre-existing tenancy agreement, the tenant approached Leeds City Council Housing Options alleging illegal eviction.

Leeds City Council understood there were reasonable grounds to believe Saville had intent to unlawfully evict the tenant and had committed an offence under Section 1(2) of the Protection from Eviction Act 1977 by unlawfully depriving the tenant of the occupation of the flat.

After being found guilty at a previous hearing which he failed to attend, Saville was brought before Leeds Magistrates Court last week and sentenced to 20 weeks custody suspended for 12 months, 250 hours unpaid work and £1,000 compensation.

The landlord was also banned from contacting the tenant indefinitely.

Cllr Debra Coupar, Leeds City Council’s executive member for communities, said: “It is our priority is to ensure residents have a secure home to live in.

“There is a wide range of help and support available for landlords to ensure they fully understand the rules and regulations that keep them and their tenants safe and tenancies and contracts legally sound.

“This conviction is a clear warning that we refuse to stand by when landlords do not follow these rules and we are dedicated to ensuring the welfare, safety and security of all tenants in Leeds.”

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BTL landlord jailed for forging HMO documents

February 18, 2019

An unscrupulous landlord who converted three family homes into houses in multiple occupation (HMO) without planning consent has been jailed for forging documents.

Siddarth Mahajan from Milton Crescent, Ilford, Essex, converted a three-bedroom property in Sherwood Gardens, Barking, without planning permission, which was uncovered following an investigation by Barking and Dagenham Council.

The council had become suspicious after building work was done at the property without a planning application.

Mahajan, 38, claimed the property had been in use as an HMO for more than a decade so he was immune from enforcement action.

The landlord produced tenancy agreements, a letter from an estate agent and a sworn affidavit which appeared to show that the property had been a HMO dating back to 2008. However, an investigation by the council’s discovered that the documents were forgeries.

The council later discovered that Mahajan had also converted two properties in St Erkenwald Road and Ripple Road, Barking, without consent too.

Again, the documents provided to suggest that the HMOs were for more than 10 years and therefore immune from enforcement action were also forged.

Mahajan guilty on two counts of perverting the course of justice and three counts of using copies of forged documents at Snaresbrook Crown Court, and was sentenced to 16 months in jail.

Cllr Margaret Mullane, cabinet member for environment and community safety, said: “This dishonest landlord repeatedly refused to comply with the law and we pursued all the legal avenues that were available to us to ensure that he was brought to justice.

“We will continue to crack down on rogue landlords to improve standards and to ensure tenants have a decent home.”

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Overseas buyers exploit weak pound to acquire property in London

February 18, 2019

Overseas investors snapped up more than half of all properties for sale in prime London in the second half of 2018 as sterling weakness gave overseas buyers a favourable exchange rate, new figures show.

With the plunge in the value of sterling in the wake of the Brexit vote, overseas buyers have been taking the opportunity to acquire property in the UK and make a significant saving.  

International buyers bought 57% of homes in prime central London in H2 2018, which is the highest level since the 58% recorded in H2 2012, according to new data from Hamptons International, part of Countrywide.

Various agents report that there has been a sharp rise in interest in buy-to-let property from investors in Hong Kong and other countries with currencies pegged to the U.S. dollar, which currently stands at $1.29 against the pound, down from $1.50 the day before the EU Referendum on 23 June 2016.

But EU buyers have regained their place as the biggest group of international buyers in prime central London by purchasing 19% of homes in H2 2018, up from 10% in H2 2017.

The proportion of homes bought by Middle Eastern buyers in PCL has almost halved over the last year from 15% in H2 2017 to 8% in H2 2018.

International purchasers bought 36% of homes in Greater London in H2 2018, up from 31% in H2 2017, thanks primarily by an increase in EU buyers in Greater London. 

Over the last year the proportion of homes bought by buyers from India (+3%), Russia (+1%) and Hong Kong (+1%) has also increased.

Aneisha Beveridge, head of research at Hamptons International, commented: “The proportion of homes bought by international buyers in London hit the highest level in six years.  In H2 2018, 57% of homes in prime central London were purchased by a foreign buyer.  The increase was caused by a drop off in UK buyers and a 9% year-on-year rise in EU buyers.

“Sterling’s weakness, making it cheaper for many international buyers, seems to be outweighing Brexit uncertainty when it comes to foreign buyers making a decision on where to buy a home.  A property that would have cost an EU buyer £1million in H1 2016 effectively cost £124,000 less in H2 2018 due to sterling’s depreciation.”

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Renters almost twice as likely to experience a pest problem in their home

February 18, 2019

Three fifths of Brits have experienced a pest problem within their home, with 64% of those who have had an infestation living in rented accommodation at the time, while 36% were in a property they owned, new research shows.

A new study has found that 57% of British adults have experienced a pest problem within their home, with 6% of respondents polled admitting they had previously changed their address due to an infestation of unwanted animals, insects or other critters.

Those living in London, the South East and Scotland the most likely to have experienced an issue with uninvited house guests, according to the study of over 2,000 British homeowners carried out by Hillarys.

All respondents were initially asked if they had ever lived in a property where a pest infestation had been uncovered, with 57% admitting they had.

Researchers broke down the answers and found the following regions were most likely to have a pest infestation:

London - 69% (of respondents from this region had a pest control issue in their home)

South East - 66%

Scotland - 64%

East Midlands - 61%

North East - 58%

Northern Ireland - 57%

West Midlands – 55%

Yorkshire and Humberside – 51%

North West - 46%

East of England - 42%

Wales - 41%

South West - 39%

All participants were asked to reveal if a pest infestation would incentivise them to move home, with almost two thirds (64%) confessing it would and a further 6% revealing they had already relocated for this reason.

When asked to state the pest issue that would, or already had, made them want to leave a property, the top five answers emerged as follows:

Rats - 26%

Spiders - 16%

Wasps - 14%

Mice – 11%

Ants – 9%

Tara Hall, spokesperson for Hillarys, commented: “We’ve all encountered the odd creepy crawly in our home, but dealing with a recurring infestation can be expensive and stressful. This survey, alongside our infographic, highlights the different experiences with this issue across the UK.”

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The best cities to rent out property on a room by room basis unveiled

February 15, 2019

A number of buy-to-let landlords prefer to rent out property on a room by room basis instead of renting the whole property to one person or a family.

Some landlords prefer this option as it sometimes offers an opportunity to bank higher incomes per month, while tenants get to reduce their monthly rent by sharing it with others.

But what cities in the UK are ultimately best to rent out property on a room by room basis?

New research by Glide has revealed the top ten share hotspots based on house share opportunities, the cost of rent, job opportunities, amenities and affordability.

The study, which looked to identify the best house share hotspots across the country for students and young professionals, found that Bristol is the number one city in the UK for house sharers, based on the criteria.

Bristol was ranked the best location, with 229 advertised jobs per 10,000 people and 945 house shares available

Nottingham’s consistency across the rankings meant the city came in second - with its job opportunities, broadband speeds and university rankings all scoring in the top ten, it was only let down by relatively high rental costs.

Birmingham made up the top three locations, with its comparably low rents helping it to score well, but was let down by having only 145 job opportunities per 10,000 people currently advertised.

The top ten house share hotspots are:

1.       Bristol

2.       Nottingham

3.       Birmingham

4.       Manchester

5.       Liverpool

6.       Derby

7.       Southampton

8.       Brighton and Hove

9.       Leicester

10.     Portsmouth

London was the best location for variety of house share opportunities, with over 19,000 rooms available, however with the average monthly rent of £3,278 per calendar month (pcm) is six times higher than Bradford, which is the most affordable city to live in at an average of £499pcm.

London, Edinburgh, Manchester were the top three cities for university rankings, with the cities all boasting institutions in the top ten of the UK University Rankings 2019. #

When looking at available job opportunities, York, Coventry and Derby were the top three ranked cities, with 470, 408 and 382 jobs available per 10,000 people.

James Villarreal, director at Glide said: “With so many students and young professionals choosing to house share, we wanted to find the best cities across the UK to suit their needs.

“When looking for a new house share, there are some important considerations to think about before signing, including location compared to your university campus or workplace, transport links and monthly bills.”

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Landlords are being ‘persecuted’ under landlord licensing scheme – claim

February 15, 2019

Buy-to-let investors should be ‘extremely wary’ of buying property in an area affected by selective licensing rules because many local authorities are using selective licensing to introduce penalties for private landlords that go well beyond the mandatory government landlord licensing rules, according to Kirwans law firm.

The company argues that legislation introduced by part three of the Housing Act 2004 in areas affected by poor-quality rental properties, irresponsible landlords and anti-social behaviour, have enabled local authorities to routinely pursue the most serious enforcement option open to them, which can sometimes result in unfair penalties for landlords. 

David Kirwan, managing partner at Kirwans, said: “This can result in criminal records, rent repayment or a ban from renting out property. Even if LAs opt to avoid the courts, civil penalty fines of up to £30,000 can be imposed.

“However, rather than pursue these harshest of punishments, LAs also have the option of working with those failing to comply to offer advice and support, educating them about their duties and responsibilities and helping to create a reliable pool of landlords within the city.”

Kirwan points to Liverpool City Council’s decision to hold a public consultation into renewing its landlord licensing scheme for a further five years as a classic example of the ‘persecution’ of what he describes as ‘innocent landlords’.

Kirwan fears that the cabinet’s approval of the recommendation will result in more landlords being unfairly prosecuted if the consultation leads to the initiative continuing until April 2025.

He argued that the heavy-handed nature of the penalties meant inexperienced or first-time landlords who do not realise the importance of applying for licences could find themselves in court, forced to pay back 12 months’ worth of rent, or banned from operating properties in the area.

Kirwan added: “I have been extremely disappointed to learn then, that rather than choosing the option that, in some cases, would be eminently more sensible, councils such as Liverpool are all too often pursuing the harshest of punishments.

“The outcome is such that well-meaning men and women who have ventured into property letting in a bid to provide a pension or extra income are finding themselves in a truly terrifying situation simply for what is often a simple administration process failure.

“Meanwhile, the real rogue landlords may simply choose to avoid the licensed areas, moving their poor practices to areas where such schemes are not currently in place.”

Last summer, the government announced a review of selective licensing and how well it is working, with the findings due to be published this spring.

In the meantime, Kirwan is urging landlords to take extra care when buying a property in the Merseyside area.

He continued: “Liverpool City Council’s practice of punishing landlords who fall foul of the rules in the harshest possible way means that landlords must be extremely wary of buying in an area affected by selective licensing rules.

“Those that choose to do so must make sure that they have the necessary licences in place and ensure they comply with every obligation the scheme makes of them – or face what can be heart-breaking consequences.”

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Landlord ordered to pay £5,400 for poor management of unlicensed properties

February 15, 2019

A buy-to-let landlord in Doncaster has been ordered to pay more than £5,000 in fines and costs following a successful prosecution brought by Doncaster Council.

Almas Rashid of Thorne Road pleaded guilty to seven offences under the Housing Act 2004 relating to two houses in multiple occupation in Wheatley. 

The offences included the failure to obtain a licence from the council for each property, failure to comply with an Improvement Notice after an inspection from the council found both properties in disrepair and non-compliance with HMO regulations relating to fire safety and poor management of the properties. 

Rashid also pleaded guilty to not providing the council with relevant documents to help the investigation at one of the properties.

The landlord was ordered to pay £400 per offence, £2,800 in total, costs of £2,579.73 and a £40 victim surcharge.

Cllr Glyn Jones, deputy mayor and cabinet member for housing at Doncaster Council, commented: “This positive court result sends out a clear message to landlords.

“The council takes reasonable effort to secure compliance with the law by a process of advice and education.

“However, where appropriate, we will not hesitate to take tough action against landlords who fail to comply with licensing rules as we strive to drive up standards, improve safety for tenants and reduce the negative impacts experienced by some of our communities.”

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New tenant packs could help save lives

February 15, 2019

New tenant packs designed to help landlords raise awareness of fire and carbon monoxide dangers have been launched Aico Ltd.

Aico, a major provider of residential fire and carbon monoxide alarms in the UK, hope that the new tenant packs, part of its #AlarmsSaveLives campaign, will highlight how important it is to regularly test your Fire and Carbon Monoxide Alarms.

Customers can currently request a variety of #AlarmsSaveLives resources from the Aico website, including A3 and A4 posters, a fridge magnet, a coaster, a pen and a tenant card highlighting how to test an Aico alarm.

The new #AlarmsSaveLives animation is also available for download and use across organisations’ social media channels, to help with further raising awareness of this campaign.

The initial idea for the tenant packs came about following a conversation between Peter Marr, senior electrical officer of Sheffield City Council and Joanne White, marketing manager of Aico.

Marr commented: “We have been working closely with Aico for many years, investing and improving fire safety for residents and properties alike.

“As a social housing provider, occupancy profiles mean training is always an on-going issue, as the weak link to any system is often the human element; therefore, reminders and re-educating is an ever constant.

“This is an excellent example of a simple idea being developed and improved when shared; a real positive when likeminded companies’ philosophy is to strive for improvement.”

Cllr Phillip O’Dell, Harrow Council’s cabinet member for housing, is among those supporting the campaign.

He said: “It’s the most important button in the house - press it regularly for peace of mind. It’s a message we reinforce for our tenants all the time, and why we’re fully behind Aico’s campaign to encourage regular smoke detector testing.”

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Online agent responds to ‘landlords’ needs’ by enhancing ‘UPay On Success’ product

February 15, 2019

Online letting agent Upad has pledged to challenge landlords’ ‘expectations’ with the revamp of its ‘UPay On Success’ product which means that landlords only pay their fee once the tenant has signed a tenancy agreement.

Building on a series of changes to its products which have included the introduction of an alternative deposit option, payment via direct debit and a streamlining of its rental packages, Upad has announced that with immediate effect, its UPay On Success product, charged at £449, is now only payable once a tenancy agreement has been signed.

Upad says that it has made the change after listening to the needs of landlords and providing them with a range of products and services that offer clarity and transparency, whilst remaining competitively priced. 

Upad’s founder and chief executive, James Davis, said: “When we launched UPay On Success a year ago, we did so to provide a comprehensive package that supported less experienced landlords who required a suite of products that included everything from a Rightmove Premium Listing, through to professional photography and compliance-proof paperwork.  At that time, payment only became applicable once a tenant had been identified and the referencing process commenced.

“Today’s announcement, however, takes that a step further and payment is now only due once the tenant has signed the contract.  As the UK’s most dedicated online letting agent, we’re committed to both responding to landlords’ needs, and challenging their expectations.”

As part of the revamp of Upad’s UPay On Success product, the associated terms and conditions have also been given an overhaul. 

Complex caveats have been removed and the remaining terms and conditions are clear, simple and straightforward.

Mark Watson, a landlord with a portfolio of properties across North West London, commented: “One of the key reasons that I’ve chosen to let my properties through Upad, is the commitment that the team there shows to continually reviewing the market and responding to the needs of landlords – whatever their bespoke needs may be.

“In an increasingly complex rental market, the straightforward approach provided by Upad should be applauded.”

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Landlords starting to feel ‘the pressure’ to increase rents to offset tax changes

February 14, 2019

The increasing tax burden on landlords is likely to result in increased rents, according to research from the Intermediary Mortgage Lenders Association (IMLA).

While rental prices continue to be subdued and below the rate of consumer price inflation across much of the UK, as reflected by the latest ONS data, landlords are now facing the challenges of increased legislation and changes to mortgage interest tax relief.

Kate Davies, executive director, IMLA, said: “As buy-to-let borrowers start to feel the effects of income tax changes reflected in their most recent tax bills, the pressure to increase rental prices is likely to mount.”

The association predicts that gross buy-to-let lending will drop 6% to £36bn this year and £35bn in 2020, with landlords acquiring 59,000 buy-to-let properties in the coming year, down from 66,000 last year, reducing the supply and much needed properties in the private rented sector.

The IMLA forecasts that gross mortgage lending will total £269bn in 2019 – a similar level to last year – with remortgaging set to remain roughly unchanged year-on-year at just over £100bn.

Davies commented: “UK Finance figures showed that in Q3 2018, new buy-to-let loans for house purchase were down 15% on Q3 2017 numbers and 50% lower than three years earlier, when the first government changes were announced, marking  the end of a period of growth in the stock of private rental dwellings.

“With landlords set to feel the pain of increased costs and legislation for several more years, the government must act to ensure that no additional measures that risk further eroding the health of the Private Rental Sector are introduced, and that the number of available rental properties does not decrease still further.

“IMLA will continue to monitor the impact of the tax and regulation changes, as many benefit claimants, who would in the past have had access to social housing, continue to rely on the Private Rental Sector.”

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Buy-to-let remains a ‘lucrative investment’ as rents rise across the UK

February 14, 2019

Private rental prices paid by tenants in the UK rose by 1% in the 12 months to January 2019, unchanged from December 2018, according to the data from the Office for National Statistics (ONS).

In England, private rental prices grew by 1.1%, Wales experienced growth of 0.9%, while in Scotland private rental prices increased by 0.7% in the 12 months to January 2019.

London private rental prices rose by 0.1% in the 12 months to January 2019, down from 0.2% in December 2018.

Reflecting on the latest rental data, Marc Von Grundherr, director of Benham and Reeves, commented: “Despite the war waged on buy-to-let landlords by the government of late, the sector remains a lucrative investment with yields in many areas of the UK holding firm.

“Of course, changes to stamp duty and tax thresholds have had a notable impact and as the government look to rob Peter to provide a house for Paul, an inadequate level of suitable rental stock will ensure rental growth remains buoyant as demand exceeds supply.

“Come June, we may see a further unsettling of the sector with the introduction of a ban on lettings fees and it will be interesting to see how the dynamic shifts between tenant, landlord and agent and whether this has an immediate impact on the cost of owning or renting a buy-to-let property.”

Given the current market landscape, a continued increase in the cost of renting was to be expected and this is likely to remain consistent over the coming year, according to Tom Gatzen, co-o-founder of ideal flatmate.

He said: “Not only is a lower level of rental stock a contributing factor, but we’ve seen yet more pressure added as a result of Brexit based uncertainty as hold off on a purchase until the political dust has settled. Many

“Despite a marginal slowdown in London rental growth, we’ve seen a sustained level of demand for room rentals early in 2019 with the number of letting agents and landlords bringing stock onto the market continues to slow.

“We believe this is only a temporary hesitation although it could persist until the letting fee ban is introduced and both agent and landlord know where they stand for sure, in which case the imbalance of supply and demand will see London rental price growth increase once again.”

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Landlord tragically killed while renovating BTL property after 6ft wall collapsed

February 14, 2019

A buy-to-let landlord was killed while renovating a property she owns with her husband when a 6ft garden wall collapsed on top of her.

Jayne Chaffey, 59, died while working in the garden of the house she and her husband recently acquired in the Welsh valleys town of Mountain Ash in Rhondda Cynon Taf.

The couple bought the terraced house at auction for £40,000, but tragically she was killed while weeding and decluttering plants from the garden when a breeze block wall collapsed on top of her.

Andrew Chaffey, who recently retired as a sergeant from his police force, said: “We liked the property and on coming away we knew there were a few minor maintenance issues but the main thing to fix was the rear garden.

“We decided the best course of action was driving up with our friend to tackle the garden.”

The couple, based in Taunton, Somerset, drove 90 miles from their home to the house in Mountain Ash, where Ms Chaffey died following injuries both to her brain and to her spine.

“Nothing will ever describe the devastation that Jayne's death has caused me and my family,” Mr Chaffey added.

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Proportion of income spent on rent by private tenants has fallen

February 14, 2019

The proportion of income spent on rent in the private rented sector has fallen from 35.4% in 2010/11 to 32.9% in 2017/18, the latest figures show.

In contrast, the amount of income used for rent by social tenants, including from housing benefit, has increased from 26.7% to 28%.

The data from the English Housing Survey for 2017/18 reveals that that over the ten years between 2008/09 and 2017/18, average weekly rents across England, excluding London, in the private rented sector increased by 22%, almost half the increase of 43% in rent in social housing sector.

In London, private rents increased by an average of 34% compared to 55% in the social sector.

The figures come as the Office for National Statistics has reported that rents are falling in real terms, having increased by just 1% year-on-year.

Separate figures from the government’s 2018 survey of landlords found that 70% kept their rents the same when they most recently renewed a tenancy, suggesting that most landlords prioritise keeping good tenants for a long term.

However, the Residential Landlords Association (RLA) is warning of the risks now posed to improved affordability in the PRS as a consequence of changes such as those to benefits and increased taxation driving landlords out of the market.

Research undertaken by the government found that more than 15% of private landlords in England, representing just over 23% of all tenancies in England, plan to either decrease the number of properties they let or leave the market altogether.

Of this group, almost 70% said it was due to legislative changes, including the phased reduction of mortgage interest relief to the basic rate of income tax and the 3% stamp duty levy on investment in new rental housing.

Alan Ward, chair of the RLA, said: “This data shows that the private rented sector is becoming more affordable, demonstrating the folly that forms of rent controls would be. We cannot however be complacent.

“The danger signs are there. Tax increases are choking the supply of homes to rent. Landlords like to keep their tenants who benefit from lower or no rent increases when tenancies are renewed, but fewer homes for rent means less choice for new tenants.

“We need positive, pro-growth taxation that supports landlords investing in the new homes to rent the country desperately needs.”

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Increasing SDLT for overseas buyers ‘would send a catastrophic message’

February 14, 2019

The government’s decision to launch a consultation into a proposal to add 1% onto the stamp duty paid when buying a home in England and Northern Ireland, payable by those who are not resident in the UK, has been slammed by a leading London-based letting agent.

This comes nearly three years on from the increase in stamp duty for native buy-to-let investors, a move that has deterred many from investing in the sector further reducing the number of available properties while at the same time increasing rents.

Benham and Reeves, one of London’s largest independent letting and sales agents, believes this further restriction imposed on foreign investment will only see the problem worsen.

Benham and Reeves director, Marc Von Grundheer, said: “The decision to impose a further penalty on the buy-to-let market via purchases from foreign buyers will send a catastrophic message to this segment of the market at a time when London needs nurturing, not further suffocation.

“When will the government learn that the use of stamp duty as a blunt instrument to gain quick and easy revenue is nothing but counterproductive? We’ve already seen the impact a squeeze on the buy-to-let market can have with the Treasury some £1bn worse off as a result and any similar endeavours will no doubt yield the same results.

“The truth of the matter, as stated by a recent paper by the London School of Economics, is that the vast majority of foreign investment into UK property provides fuel for the rental market. To discourage this will leave yet more hard stretched Londoners scrambling to find suitable accommodation for themselves and their families.”

Von Grundheer firmly believes that any further hike in the cost of purchasing property will inevitably lead to further rent increases.

“An attack on those from abroad who wish to show faith in our current market is a foolish endeavour indeed,” he added.

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Thousands of landlords ‘illegally’ letting energy inefficient homes

February 13, 2019

Tens of thousands of landlords across the UK could be unwittingly renting out property illegally because they have should have an energy performance certificate (EPC) rating below E, but simply do not know it.

A new report by property technology firm Spec suggests that as many as 2.5 million Energy Performance Certificates (EPCs) in the UK are wrong due to inaccurate measurement standards and practices, putting many landlords at risk of inadvertently breaking the law.

According to the report, the size of a property has been recorded so inaccurately that it varies by more than 10% from the actual measurement in around a quarter of all existing EPCs.

In fact, the report claims that current measurement techniques used by Domestic Energy Assessors’ (DEA) can lead to inaccuracies regarding floor space measurements. These techniques, the report claims, have created an average discrepancy on property areas of around 8.6% - around 87 sq ft.

Since April 2016, rules have been in place across England and Wales, setting out minimum energy efficiency standards (MEES).

These regulations made it unlawful for landlords to grant a new lease for properties that have an energy performance certificate (EPC) rating below E, from 1 April 2018, unless the property is registered as an exemption.

Owners of the draughtiest homes – those rated in the worst energy bands, F and G – have been required since April to upgrade them to band E or be barred from agreeing new tenancies.

However, the report estimates that about 35,000 E rated properties are below the legal standard for the residential lettings market.

Antony Browne, senior advisor at Spec, said: “Our study reveals that it’s not really a case of if your EPC is measured inaccurately, but how much it is measured inaccurately.

“Inaccurate EPCs present serious challenges and risks not only to property professionals, consumers and estate agents - but also the environment. It means tens of thousands of landlords are unwittingly renting out their properties, opening them up to the risk of fines of thousands of pounds through no fault of their own.

“Measuring the energy efficiency of buildings accurately is essential in limiting their environmental impact and tackling the bigger global issue of climate change. If you are not measuring the problem properly, you won't tackle it effectively.”

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Tenant Fees Bill receives Royal Assent

February 13, 2019

The Tenant Fees Bill, banning landlord and agents from charging fees to tenants, has become an Act of Parliament after being given Royal Assent.

The act means that from 1 June 2019, landlords and agents will no longer be able to charge fees to set up or renew a tenancy in the private rented sector.

The new law will not just mean a ban on letting fees, but also the majority of other upfront fees payable by tenants to rent a property in England.

There will also be a cap on the amount of refundable security deposit a tenant would be required to pay to the value of five weeks’ rent as well as a cap on the amount of holding deposit a tenant will be required to put down to secure a property to the value of one week’s rent.

The government believes that the Bill will make renting properties in England fairer and more affordable for tenants by reducing the costs at the outset of a tenancy, at the same time as improving transparency and competition in the private rental market.

David Cox, chief executive, ARLA Propertymark, commented: “We’ve known the tenant fees ban has been coming for a long time, but with only 109 days to go until it comes into force, the industry must start taking time to prepare.

“The government will soon publish its guidance now that we have legislative certainty, which will give agents a better understanding as to how the ban should practically be implemented.”

Under the terms of the new Act, the maximum amount that can be charged for a change to a tenancy is £50. Any landlord breaching the ban for the first time will be hit with a £5,000 fine.

Housing and Communities Secretary James Brokenshire said: “Tenants across the country should not be stung by unexpected costs from agents or landlords.

“This Act not only delivers on our promise to ban letting fees but also caps deposits at 5 weeks’ rent and sets out how and when landlords can charge tenants fees – helping renters keep more of their hard-earned cash.

“This is part of our ongoing action to make renting fairer and more transparent and make a housing market that works for everyone.”

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Letting agent left red-faced after tomato plants mistaken for cannabis

February 13, 2019

When a tenant renting a property in West Lothian was asked by their mother to look after her tomatoes while she went on holiday, he did not expect that to lead to an investigation which could have resulted in potential eviction from his property.

But the tenant soon found himself under investigation after the tomato plants were discovered by his letting agent, who was managing the property, during a routine landlord inspection.

Unfortunately for the tenant, the tomato plants were mistaken for cannabis they were spotted by the agent growing under specialist lights in a bedroom.

A blog posted by Robert Young, chief executive of The Key Place, stated: “One of The Key Place’s newer members of staff went to carry out an inspection at a property where we had long term tenants, who had never given us previous cause for concern as a result of inspections.

“The staff member arrived back at the office looking somewhat stunned, to say that the tenants were growing cannabis plants in the bedroom – she saw a number of plants, underneath specialist lights.

“In recent times we have been made increasingly aware of the problems of cannabis farms in rented properties.”

According to Edinburgh Live, Young arranged to visit the Bo'ness property with his office manager.

He continued: “On answering the door, I asked the tenants outright if they were growing cannabis plants.

“Amidst much laughter, they explained that it was not a cannabis farm but the tenant’s mother’s tomatoes, which they were looking after while the mother was on holiday.”

Young told Edinburgh Live that the mix-up in relation to the plants was taken in “good part by all parties”.

He added: “The tenant found it hilarious that his mother's tomato plants could cause so much fuss and couldn't wait until she got home to pull her leg about it.

“The life of a letting agent throws up many, many opportunities and challenges and is never, ever dull - the key thing is to hear all sides of every story, always keep an open mind and to work to get an amicable resolution to situations....and of course to be able to see the funny side of life.”

 

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The UK’s second tallest Build to Rent tower unveiled in Salford

February 13, 2019

Anaconda Cut, standing at 131 metres tall, making it the tallest building in Salford, has been officially launched.

The 44-storey tower, which features 349 flats, is funded by real estate investment firm, Europa Capital, and is the second tallest Build to Rent tower in the UK after Uncle in London's Elephant & Castle, and Salford's tallest building. 

U.S. Build to Rent provider Atlas Residential is managing the development, offering luxury rental accommodation and amenities, pushing the boundaries of those schemes that already exist in the UK, making it far more like something from the hospitality sector. 

A foyer with 24 hour hotel style concierge and a mezzanine co-working space sits on the ground floor of the tower along with a resident’s gym offering a variety of HITT workouts and yoga sessions.

The building also has a pet-friendly environment allowing residents to bring their animals along with them and the option to leave them behind with an onsite pet concierge. Parking is situated in the  basement over three levels, offering 79 spaces and bicycle storage beneath.

High-level communal roof terraces and seating to relax in has been designed on the 17th floor along with a cinema screening room whilst the entire upper 43rd floor is dedicated to a ‘Sky Lounge’ for all residents to enjoy with unprecedented views over the City of Manchester and stretching as far as the Pennines.

Delivered by Renaker Build Limited, the property is located in the Greengate area on a former disused car park, marking the entry into Salford as you cross the river Irwell from Manchester City Centre and on the western fringe of Media City village.

The wider masterplan for Greengate will see a significant amount of residential developments being delivered over the next decade transforming it into a vibrant new community.

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Mansfield BS introduces BTL product for expats

February 13, 2019

Mansfield Building Society has launched a buy-to-let mortgage product exclusively for expat borrowers.

The new product, available with no completion fee, is a two-year discounted rate deal offered at up to 70% loan-to-value (LTV) at 3.69%.

The new deal is available in addition to The Mansfield’s other two-year discounted expat buy-to-let product, which is currently available at 2.95% with a 1.25% completion fee.

Both expat buy-to-let mortgage products come with a £199 application fee on loans between £100,000 and £500,000.

Rental income must meet The Mansfield’s standard interest coverage ratio of 125% at 5% or 2% above pay rate, whichever is higher.

Paul Lewis, national development manager at The Mansfield, said: “Many UK nationals are now working or living overseas and, whatever impact Brexit may have, there will continue to be demand from expat’s for UK investment property.

“Our latest expat buy-to-let product should certainly interest expat’s and their advisers, given that it comes with a number of attractive features, most notably the absence of a completion fee.

“We believe that by offering more choice and a commitment to look at all cases individually we have a compelling expat purchase and remortgage proposition that adds further weight to our overall buy-to-let range which covers an increasing number of mainstream and niche sectors.”

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‘Political and economic uncertainty’ boost demand for rental properties

February 12, 2019

There has been a significant rise in demand from people looking to rent property amid political and economic uncertainty and this is placing upward pressure on rental values, the latest figures show.  

The private rented sector often provides greater certainty and security for those who need to move home, especially during uncertain times, with fixed rent over a fixed term helping tenants to manage their budgets and plan their lives accordingly.

This largely explains why there has been a sharp rise in tenant demand, helping to push up the average cost of renting a property in the UK by an average of 2.5% over the past year, according to the latest HomeLet Index.  

Tom Gatzen, co-founder of ideal flatmate, commented: “While political and economic uncertainty may be bringing a slowdown in house price sales, the consequential, additional strain being placed on the UK’s lettings market has resulted in strong growth where rental costs are concerned.”

The HomeLet data, which is based on new lets agreed by landlords and agents using its referencing service, reveals that average rents in London unsurprisingly remain the most expensive in the UK, at an average of £1,588pcm, which is up 3.7% on last year, and this trend looks set to continue.

Gatzen added: “Having bore the worst of the Brexit brunt across the sales market, London is driving price growth across the national rentals market, as an already inadequate supply is being stretched even further.

“This is largely due to buyers refraining from a purchase and remaining in the rental sector, as well as the reduction in suitable properties on the market due to the government’s crusades against the buy-to-let sector in recent months.

“Looking ahead, London remains one the places to live and work, in or out of Europe, and this consistent demand will ensure rent prices remain buoyant regardless of how or when we exit the EU.”

 

 

 

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Rents rise in prime London

February 12, 2019

Rental values in prime London increased by 1.9% in the fourth quarter of 2018 on the back of greater demand from tenants, as continued political uncertainty pushed would-be tenants into the prime rental market, new figures show.

The latest LonRes Prime London Lettings Index reveals that rents rose owed in part to a supply-demand imbalance in the market, with 80% of respondents to the LonRes Agent Survey reporting an undersupply of studios and one-bedroom flats in their area.

Over 2018, 13% fewer properties reached the market.

But it is worth pointing out that prime central London saw a slight year-on-year decline in rental values, down 1% compared to Q4 2017.

Many landlords remain cautious and are not increasing rents for existing tenants, according to the report.

In Q4 2018, 72% of letting agents surveyed said that most of their landlords were not upping rents on renewal.

As for new tenancies, tenants negotiated an average of 4.9% off initial asking rents over Q4 2018, down from 6.4% a year earlier.

Meanwhile, 31% of properties over Q4 2018 underwent a price reduction before securing a tenant – compared to 41% in Q4 2017.

A combination of fewer homes to rent reaching the market and increased demand suggests that rents in prime London will rise in the near term.

Some 58% of respondents to the LonRes Agent Survey reported an increase in tenants who were previously looking to buy. Just 8% reported a fall.

An increase in renewals resulted in fewer new lets agreed in Q4 2018 - down 17% on Q4 2017. The falls were greater in the second half of last year with an 11% reduction in new lets compared to 2% in H1 2018.

With fewer properties available to rent, the time taken to find a new tenant has fallen. In Q4 2018, 30% of properties let in prime London had a new tenant within a month of being listed, up from 23% in Q1 2018 and the highest for four years.

Marcus Dixon, head of research at LonRes, said: “In an uncertain market the response by both buyers and sellers in prime London has been to hunker down and observe rather than participate. This is impacting on both transaction levels and prices. However for those willing to buy, there are opportunities to be had and purchasers are negotiating accordingly.

“The prime rental market continues to benefit as would-be buyers become tenants. Despite fewer new lets agreed, owing to an increase in renewals, stock levels are low and competition among prospective tenants is leading to increases in achieved rents in most central London areas. Fewer landlords are needing to reduce their asking prices and discounts have fallen back.”

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Landlord fined for allowing tenants to live in property deemed ‘unfit for purpose’

February 12, 2019

A rogue landlord who allowed a family to live in a house described as “unfit for human habitation” has been fined £11,000.

The house on Webster Road in the Wavertree area of Liverpool featured a number of safety hazards, including missing smoke alarms and a missing lock on the back door that could have endangered the safety of the tenants.

Liverpool Magistrates' Court also heard how the family of four were being rained on in their own kitchen because of a large hole in the ceiling.

Complaints about the home were first raised by the family in November 2017 but the landlord failed to take any action despite multiple attempts to contact them by Liverpool City Council.

The landlord, Imperial Property Services Limited, has now been hit with an £11.000 fine after a judge ruled the unlicensed property “unfit for purpose”.

District Judge Andrew Shaw, sentencing the firm, fined Imperial Property Services Limited £10,000, in addition to costs of £826 and a victim surcharge of £180.

Cllr Lynnie Hinnigan, deputy mayor and cabinet member for housing, said: “This is a shocking case of a landlord who has housed a family in appalling conditions and flagrantly disregarded the law.

“It is absolutely shameful that this company believes it is acceptable to rent out a property which is in this condition, placing a young family in an unsafe environment not fit for human habitation.

“This case demonstrates clearly the value of our Landlord Licensing scheme in bringing to book those who are not providing decent quality homes in the private rented sector.”

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Political broadcaster Andrew Neil to chair major landlord debate in London

February 12, 2019

Journalist and broadcaster Andrew Neil will chair the Government Panel Debate at the National Landlord Investment Show in London, it has been confirmed.

The debate, which will kick-off the show that takes place at the London Olympia Conference Centre on March 21, will also feature Iain Duncan Smith, former Conservative Party Leader & Secretary of State for Work and Pensions.

The Government Panel Debate, which will take place from 10am until 11.15am, will be followed by a Legal Debate to be chaired by Paul Shamplina of Landlord Action.  

With so much change and uncertainty in the market, the National Landlord Investment Show is an important event for 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 also feature a series of other expert property panel discussions, which 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.

National LIS will take place on the following dates in 2019:

21st March - London Olympia

15th May - Aston Villa Football Club

13th June - London Olympia

8th October - Manchester United Football Club

5th November - London Olympia

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Landlords urged to have their say on local licensing consultations

February 12, 2019

With several licensing consultations currently being run by local authorities across the country, the Residential Landlords Association (RLA) is encouraging buy-to-let landlords and letting agents to offer their views.

Coventry Council, Hounslow Council and Waltham Forest Borough Council are among the local authorities holding ongoing licensing consultations at the moment.

The RLA offers the following information:

Hounslow Council

Hounslow Council’s additional licensing scheme is due to expire in May 2019. The Council has launched a consultation on whether the scheme should be extended for another five years.

The proposed scheme will apply to shared HMOs with three or more persons.  The consultation runs until 3rd April 2019 and landlords can have their say on the plans on the council’s website here.

Waltham Forest Borough Council

The Council is consulting about proposals to designate the borough, or a large part of it, as subject to two licensing schemes, under Parts 2 and 3 of the Housing Act 2004, with effect from 1st April 2020. The consultation closes on 29th April 2019 and you can have your say here

Coventry Council

Coventry Borough Council is currently running a consultation on plans to introduce a large proposed licensing scheme in the city. If the scheme goes ahead, it will impact 37 locations and affect over 9,000 properties. The consultation closes on 20th March 2019, and you can read more about the proposals and have your say on the council’s website here

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UK rents up 2.5% in a year, says HomeLet

February 11, 2019

The average cost of renting a property in the UK increased by 2.5% in the 12 months to January, the latest figures shows.

The HomeLet Index, which is based on new lets agreed by landlords and agents using its referencing service, reveals that the average rent in the UK is now £932 per calendar month (pcm).

When London is excluded, growth, in percentage terms, was actually a lower rate of 2% year-on-year, with the average rent in the UK, without the capital, now stood at £775pcm.

Unsurprisingly, average rents in London remain the most expensive in the UK, at an average of £1,588pcm, which is up 3.7% on last year.

But the region with the largest year-on-year increase is the South West, showing a 5.1% increase between January 2018 and January 2019.

Rents in January increased in 11 of the 12 regions monitored by HomeLet, with only the North East seeing a decrease in rental values.

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The most uninhabitable London boroughs for tenants unveiled

February 11, 2019

New research has identified London’s most uninhabitable boroughs for the capital’s tenants, based on the cost of living there to the average monthly wage of its residents.

The study from ideal flatmate looked at the average earnings compared to the average rent of a one-bedroom property, the varying cost of travel cards and council tax across each borough, and the average spend on food, energy bills, internet at phone across London. But other basic outgoings such as clothing or leisure activities were not factored in.

No fewer than 12 out of the 32 boroughs were found to be completely uninhabitable, with the basic cost of living accounting for, or exceeding, the average monthly earnings. A further 13 boroughs saw this cost of living account for 90% or more of the average wage.

Kensington and Chelsea, London’s most expensive borough, tops the list as London’s most uninhabitable, with home to a basic cost of living of £2,452 a month, 117% of the average monthly net pay in the borough.

The London Borough of Brent is not far behind, with the monthly cost of living reaching 116% of the average monthly pay of £1,587 for those living in the borough.

Hackney, Hounslow, Enfield, Newham, Camden, Ealing, Haringey, Barnet, Waltham Forest and Barking and Dagenham are all also home to a cost of living that accounts for all, or more, of the average monthly earnings for those in the borough.

A further 13 boroughs saw the cost of living exceed 90% but there is some hope for the capital’s tenants.

 The cost of living in Bromley hit £1,597, just 80% of the average monthly net income of £2,002, making it the most affordable place to rent in London.

Wandsworth, Bexley, Havering, Croydon, Richmond and perhaps surprisingly, Hammersmith and Fulham, all saw the cost of living sit at below 90% of the monthly average wage for residents in these boroughs.

Tom Gatzen, co-founder of ideal flatmate, commented: “While Brexit uncertainty has seen a slow in the sales market, we’ve continued to see the level of London rents climb by nearly 5% on an annual basis.

“Although unemployment has been falling and wage growth has been on the up, this research demonstrates how vast the reality gap still is between the money available and the cost of living in London. We’ve only looked at the very basics and this research hasn’t factored in things like clothing and leisure but of course, the main outgoing driving this unaffordability is the price of rents.

“With such high levels of unaffordability across the capital, it’s no wonder we’ve seen such a surge in demand for room shares. The reality for those looking to rent in London is to pay through the nose, share with a friend or partner, or to move in with people in the same situation.

“Luckily, the latter has changed drastically in a few short years and it is no longer the daunting experience it once was, thanks to greater compatibility checks ensuring that it isn’t just the property that is right for a tenant, but the people they’re sharing with as well.”

Borough

Average Monthly Wage

Average Rent (1 bed)

Monthly Travel Card

Food

Elec, gas, water

Council Tax

Internet & phone

All

Percentage of Pay

Kensington and Chelsea

£2,102

£1,950

£134.80

£30

£146

£113.09

£77

£2,452

117%

Brent

£1,587

£1,250

£194.00

£30

£146

£150.69

£77

£1,849

116%

Hackney

£1,793

£1,495

£158.30

£30

£146

£138.42

£77

£2,046

114%

Hounslow

£1,740

£1,300

£246.60

£30

£146

£147.21

£77

£1,948

112%

Enfield

£1,585

£1,100

£246.60

£30

£146

£156.62

£77

£1,757

111%

Newham

£1,585

£1,200

£158.30

£30

£146

£126.75

£77

£1,739

110%

Camden

£2,008

£1,582

£134.80

£30

£146

£149.88

£77

£2,121

106%

Ealing

£1,704

£1,200

£158.30

£30

£146

£145.01

£77

£1,757

103%

Haringey

£1,772

£1,250

£158.30

£30

£146

£158.68

£77

£1,821

103%

Barnet

£1,741

£1,150

£230.40

£30

£146

£149.39

£77

£1,784

102%

Waltham Forest

£1,721

£1,075

£230.40

£30

£146

£162.62

£77

£1,722

100%

Barking and Dagenham

£1,585

£950

£230.40

£30

£146

£150.42

£77

£1,585

100%

Harrow

£1,746

£1,050

£246.60

£30

£146

£170.07

£77

£1,721

99%

Southwark

£1,885

£1,300

£158.30

£30

£146

£133.88

£77

£1,846

98%

Tower Hamlets

£1,990

£1,430

£134.80

£30

£146

£128.93

£77

£1,948

98%

Westminster

£2,367

£1,842

£134.80

£30

£146

£71.54

£77

£2,302

97%

Islington

£2,152

£1,517

£158.30

£30

£146

£143.94

£77

£2,073

96%

Lewisham

£1,782

£1,100

£194.00

£30

£146

£150.85

£77

£1,699

95%

Hillingdon

£1,729

£1,000

£246.60

£30

£146

£141.69

£77

£1,642

95%

Merton

£1,900

£1,200

£194.00

£30

£146

£150.33

£77

£1,798

95%

Greenwich

£1,842

£1,150

£194.00

£30

£146

£143.93

£77

£1,742

95%

Lambeth

£1,970

£1,300

£158.30

£30

£146

£139.59

£77

£1,852

94%

Redbridge

£1,791

£990

£230.40

£30

£146

£156.07

£77

£1,630

91%

Kingston upon Thames

£1,987

£1,100

£246.60

£30

£146

£181.28

£77

£1,782

90%

Sutton

£1,754

£925

£230.40

£30

£146

£161.39

£77

£1,571

90%

Hammersmith and Fulham

£2,135

£1,400

£134.80

£30

£146

£102.91

£77

£1,892

89%

Richmond upon Thames

£2,127

£1,200

£246.60

£30

£146

£171.88

£77

£1,872

88%

Croydon

£1,783

£900

£246.60

£30

£146

£164.83

£77

£1,565

88%

Havering

£1,762

£875

£246.60

£30

£146

£166.96

£77

£1,542

88%

Bexley

£1,679

£800

£246.60

£30

£146

£159.91

£77

£1,460

87%

Wandsworth

£2,159

£1,365

£158.30

£30

£146

£75.10

£77

£1,852

86%

Bromley

£2,002

£950

£246.60

£30

£146

£146.28

£77

£1,597

80%

Rental data sourced: Mayor of London

Average earnings data sourced: ONS

Average council tax for each borough sorced: KFH

Other costs of living sourced: ONS

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How will the Homes -Fitness for Human Habitation- Act 2018 affect you?

February 11, 2019

Following the passing of Karen Buck’s Homes (Fitness for Human Habitation) Act 2018 into law, it is important that landlords are aware of their responsibilities in relation to the new rules.

From March 20, all landlords in England, as well as  letting agents acting on their behalf, must ensure their rental properties are fit for human habitation at the beginning and throughout the tenancy.

Failure to meet the new requirements could see tenants take landlords to court for breach of contract, forcing them to carry out improvement works as well as claim compensation.

Andrew Turner, chief executive at specialist buy-to-let mortgage broker Commercial Trust Limited, said: “For most landlords, who are managing properties that are in good condition and are well maintained, there should not be anything new to do.

“However, landlords should be on their guard as there is the potential for landlords to find themselves subject to court action from tenants, for breach of contract, should a property not meet required standards. Landlords could find themselves forced to carry out improvements and could be subject to compensation claims.

“There is the possibility that a landlord could be sued for damages, for the full duration of the contract.”

The legislation has been brought in to help raise living standards in the PRS.

Turner points out that there are a number of housing issues being looked at, which include:

•           repair work;

•           stability;

•           levels of dampness in the property;

•           internal arrangement;

•           how much natural lighting there is in the property;

•           the amount of ventilation;

•           the quality of the water supply;

•           how well drainage and sanitary conveniences work;

•           what facilities there are for the preparation and cooking of food and for the disposal of waste water;

•           and, Hazards under the Housing Health and Safety Rating System.

Under the new rules, a home needs to be regarded as significantly defective in one or more of the above areas, in order to be considered as unfit.

The Act states: “The house shall be regarded as unfit for human habitation if, and only if, it is so far defective in one or more of those matters that it is not reasonably suitable in that condition”.

A judge will ultimately make the decision on whether or not this is the case, according to Turner.

He continued: “If a problem arises in a rental property, there is an expectation that the tenant will notify the landlord, in order for any issue to be repaired within a reasonable timeframe.

“In this sense, the current landlord obligations will not change.

“So in the case of joint tenancies, a landlord will need to be made aware of a defect during the tenancy, by the tenant. The landlord must then respond within reasonable time frame to fix this issue. 

“When the property is rented out on a per room basis, for example if it is a shared property or House of Multiple Occupancy, the landlord’s obligation is instantaneous, from the moment the defect occurs, regardless of whether or not the tenant informs them.

“The landlord will again be obliged to remedy the issue within a ‘reasonable time frame’ which would be determined by the nature of the problem and potentially external factors.”

Whilst the landlord will be responsible for addressing issues in most cases, the Act does not make landlords liable for damage or disrepair caused by the tenant’s conduct.

Furthermore, the landlord will not be expected to rebuild or reinstate a destroyed building or to carry out works which are the responsibility of a superior landlord, or where it is not possible to obtain necessary third party consent.

Turner added: “The majority of landlords will not need to do anything, if they are maintaining a property in good condition, so long as they react appropriately, should a defect be reported.

“The law may have more significant ramifications where the landlord is responsible for a regulated tenancy, where repair and modernisation are restricted by the presence of a sitting tenant.”

You can read more on the Homes (Fitness for Human Habitation) Act 2018, by clicking here

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Amount tenants spend on rent falls for first time in a decade

February 11, 2019

Tenants spent £1.9bn less in rent in 2018 compared with a year earlier, marking the first annual decline in more than 10 years, new figures show.

According to data from Hamptons International, part of Countrywide, tenants in Great Britain paid £59.1bn in rent last year, £1.9bn less than in 2017, fuelled by a drop in the number of households renting and rental growth stagnating.

                       Source: Hamptons International

But over the last 10 years the total rent bill has increased by £29.9bn in Great Britain. During this period the number of households privately renting has grown by 1.7 million, or 52%, while rents have increased by 12.4%.

Total rent paid in Great Britain (£ billions rounded)

 

GB

2008

£         29.2

2009

£         34.5

2010

£         37.9

2011

£         41.7

2012

£         45.5

2013

£         46.1

2014

£         53.0

2015

£         53.8

2016

£         57.7

2017

£         60.9

2018

£         59.1

YoY Change

-£          1.9

10Y Change

£         29.9

Source: Hamptons International

Nine out of 11 regions in Great Britain saw a drop in their total rent bill over the last year; the East Midlands (£130m) and the North East (£60m) were the only regions to see an increase.

London saw the biggest drop off in the total amount of rent paid by tenants, with renters in the capital paying £20.6bn in rent in 2018, £620m less than in 2017.

Total rent paid by each region (£ billion)

 

2018 Rent Bill

1Y Change

10Y Change

East Midlands

£       2.7

 £       0.13

 £        1.70

East

£       5.0

-£      0.11

 £        3.05

North East

£       1.3

 £       0.06

 £        0.62

North West

£       4.3

-£      0.02

 £        2.59

Scotland

£       2.9

-£      0.09

 £        1.31

South East

£       8.8

-£      0.04

 £        4.19

South West

£       4.2

-£      0.11

 £        2.10

Wales

£       1.5

-£      0.05

 £        0.07

West Midlands

£       3.3

-£      0.36

 £        1.84

Yorks & Humber

£       3.3

-£      0.49

 £        1.89

London

£     20.6

-£      0.62

 £      10.53

GB

£     59.1

-£      1.88

 £      29.9

Source: Hamptons International

 

Looking longer term, the rental bill increased in every region over the past 10 years, led by growth in London where the total rental bill grew by £10.53bn over the 10-year period. 

After London, tenants in the South East (£14.19bn) and the East (£3.05bn) saw their rental bills rise the most. 

Meanwhile Wales saw the smallest rise in the total amount of rent paid by tenants over the last decade, up £70m.

Although the rate of rental growth has slowed over the last 12 months, in January the average cost of a new let rose 0.6% year-on-year compared with 2.4% in January 2017. 

New lets

 

Jan-18

Jan-17

YoY

Greater London

£      1,714

£      1,704

0.6%

    Inner London

£      2,644

£      2,612

1.2%

    Outer London

£      1,537

£      1,531

0.3%

South East

£      1,037

£      1,042

-0.5%

South West

£         784

£         787

-0.5%

East

£         943

£         925

2.0%

Midlands

£         678

£         669

1.3%

North

£         625

£         623

0.4%

Wales

£         652

£         646

0.9%

Scotland

£         639

£         634

0.7%

Great Britain

£         963

£         958

0.6%

Source: Hamptons International

London led the slowdown over the last year, but rents have gradually started to rise again.

The average cost of a new let in the capital rose 0.6% year-on-year in January. Meanwhile, the South East and South West both recorded rents falling -0.5% year-on-year.

Aneisha Beveridge, head of research at Hamptons International, commented: “The total amount of rent paid by tenants in Great Britain fell for the first time in over a decade last year.  Despite average rents rising 0.4% in 2018, fewer people renting homes meant the total rent bill shrank by £1.9bn since 2017.

“Over the last 12 months rental growth in Great Britain has slowed. Rental growth has fallen from 2.4% in January 2017 to 0.6% last month. 

“The slowdown over the last year was mainly driven by London, but rents are now gradually starting to rise again in the capital.  Meanwhile the South East and South West both recorded falling rents last month.”

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BTL landlord ordered to pay more than £10k for badly maintained property

February 11, 2019

Toilet flushing discharged into the rear yard of a property, broken fire alarms and faulty electrics were among the defects found in a rental property in East Cliff, Dover, which led to a landlord being ordered to pay more than £10,000 in fines and costs.

Landlord Fernando Xavier Da Moura Monteiro was found guilty of 22 Housing Act offences at a hearing at Margate Magistrates Court last week.

The licensed house in multiple occupation (HMO) property was inspected by officers from Dover District Council on several occasions over the past couple of years.

The property was found to have a number of defects including broken or non-working fire alarms, a deterioration and breach of fire safety measures, and accumulations of waste including foul waste discharging into the rear yard.

The court ruled that the property was in a poor state of repair and breached several management regulations and licence conditions.

The prosecution was brought by Dover District Council after the landlord ignored repeated warning to improve the property’s condition.

Cllr Pauline Beresford, DDC cabinet member for housing, commented: “We continue to work hard to ensure that private sector residents are living in accommodation that is well maintained, safe and warm.

“We take robust legal action where landlords fail to comply with the regulations and their obligations.”

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Call for Universal Credit overhaul as many claimants fall into rent arrears

February 8, 2019

Half the people seeking help with their Universal Credit claim are in rent arrears, according to Citizens Advice.

More generous advance loans for new claimants and an additional two weeks of housing benefit while they wait for Universal Credit payments to start were among the measures introduced by the government last year to address concerns that Universal Credit was pushing tenants into arrears.

But with new the report published by Citizens Advice showing 49% of those it helps with Universal Credit are in arrears on their housing payments, the Residential Landlords Association (RLA) believes that further reform is needed.

Chris Town, vice chair of the RLA, said: “Today’s report demonstrates the need for more changes to be made to Universal Credit.

“One of the main drivers of rent arrears has been that tenants cannot routinely choose to have the housing element of Universal Credit paid directly to their landlord at the start of a claim. Many tenants prefer to have the assurance that their rent is paid and their right to do this should be introduced immediately.

“This needs to be coupled with lifting the freeze on housing benefits and the housing element of Universal Credit. Housing cost support is simply not keeping up with the realities of rents in the private sector, despite them falling in real terms over the past year.”

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Tenants discovered living in cramped conditions following dawn raid

February 8, 2019

Brent Council in north London looks set to take action against a buy-to-let landlord who is accused of “exploiting tenants” after  19 people, including two children, were found living in a four-bedroom semi-detached house on Nathans Road, Wembley, HA0, during a dawn raid earlier this week.

Enforcement officers forced entry into the house on Tuesday where they discovered a garage that had been illegally turned into two bedrooms with a makeshift partition wall between them; a shed in the process of being converted into what appeared to be another bedroom and smoke alarms in a state of disrepair.

The raid was a joint operation with police officers with whom the Council often carries out operations. Intelligence is shared between the Council, police and the UK Border Agency. Brent’s aim is to support tenants and prevent them from being exploited by rogue landlords.

Cllr Eleanor Southwood, cabinet member for housing and welfare reform, said: “A landlord making £4,000 a month from exploiting tenants like this is committing an offence.

“We won’t hesitate in taking action against people who continue to treat tenants badly and provide homes that are unsafe. Our licensing scheme is clear. It requires landlords to meet certain standards and a landlord or agent who rents out to tenants without a licence is breaking the law.”

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Tips for creating a successful Build to Rent property

February 8, 2019

With a growing number of Build to Rent (BTR) developments increasing, broadband and utilities provider, Glide, has put together the top five priorities landlords should consider when creating a successful BTR property development designed for long-term occupation.

These properties need to be designed with the tenants in mind and so, community and resident experience need to be considered carefully.

To help, Glide has put together five top priorities to consider when designing a BTR development:

Understand your customer

With 37% of BTR households being occupied by young professionals, it is important that you understand what they are looking for. All inclusive bills are a high priority when choosing a place to live according to over half - 52% - of millennial movers. Any other ways to save time and make things as convenient as possible for your tenant, such as parcel storage or dry cleaning, are also desirable.

As many young professionals commute to work, it is a good idea to consider this when choosing areas in which to develop. According to recent research, 40% of those without children factor in distance to work when choosing a rental home and one in five - 21% - also prefer to live near public transport links or airports.

Sense of community

As experiences are valued highly among young professionals, creating a sense of community is key. Your professional audience needs to feel part of a well connected and respectful communal living environment.

A good way of ensuring a positive community atmosphere is a Facebook group for the building. This can be a good way for tenants to interact with other people they are living with and create social events such as BBQs and meet ups. This is particularly appealing to those who have only recently moved to the area for work and don’t know many people before they move in.

In order to accommodate and promote this social setting, spaces such as a rooftop terrace, communal garden or lounge area are a good idea for tenants to socialise and relax outside of their own property.

It’s not just a place to sleep

Creating space, or the illusion of space, is very important for ensuring that tenants don’t feel too claustrophobic. Inbuilt storage facilities will mean more floor space and open plan rooms, which are more appealing to millennials.

Lighting is crucial for making rooms appear light and spacious, so natural light is a must have. However being able to wind down with more relaxed lighting is also essential.

Therefore, well sized windows and dimmer light switches will help facilitate this. There should be lots of plug sockets available so your tenant can use lamps, and other items such as electricals like chargers and tablets, to create a personalised vibe.

Stay up to date with technology

Cutting edge technology is vital to enhance the customer experience. Millennials rely heavily on fast and reliable Wi-Fi in their lives, from streaming TV shows and movies to ordering their weekly groceries online. High speed connectivity is an essential part of renting for 80% of young professionals.

Being able to control all aspects of your home at the tap of a screen is becoming more popular. You should be sure to incorporate this and any other upcoming home technologies into any build to rent developments.

Be future-proof

As tenants are looking to rent long term, they will be keen to live in a building that is set to last. You should invest in solid infrastructure so you can ensure that your tenants have what they need for years to come.

Integrating engineering systems allows for a high quality of space which means developers have more floor space to play with.

In order to use less power, consequently providing lower energy bills, you should use a full fibre infrastructure that will stand the test of time. This will also reduce the tenants carbon footprint which is a key and topical issue for millennials.

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New ex-pat BTL product range launched by Tipton & Coseley BS

February 8, 2019

Tipton & Coseley Building Society has launched a range of ex-pat buy-to-let products for intermediaries and direct customers.

Two fixed and two discount products for purchase and re-mortgaging, with a maximum loan size of £500,000 up to 70% LTV are being offered by The Tipton.

The mortgages are available to first-time, self-employed and experienced landlords, with the latter defined as someone who currently holds, or has held at least one buy-to-let property within the last 12 months. 

In order to be considered for a mortgage, landlords must hold a UK bank account and have a minimum income of £20,000 per annum or the equivalent in foreign currency income.

The Interest Cover Ratio (ICR) calculation for experienced landlords for basic and higher rate taxpayers has been set at 125% and 130% respectively stressed at 5.5% or pay rate on the lender’s five-year fixed rate.

In 2018, Tipton reduced the ICR calculation across its standard buy-to-let product portfolio for experienced landlords and reduced its minimum application age from 25 to 21.

Cammy Amaira, director of sales & marketing, commented: “There are an estimated 5.5 million ex-pats living overseas with an increasing number looking to start or add to their buy-to-let portfolio in the UK.

“After consulting with our intermediary network and customers, we have developed a range of buy-to-let products to meet the needs of both first-time and experienced landlords with a competitive set of stress rates”.

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How much does the average landlord in England earn in income from rent?

February 7, 2019

There is a misconception among some people that all buy-to-let landlords are wealthy, but the reality is that most operate as individuals earning a modest income from buy-to-let property that is likely to supplement other earnings, the latest figures show.

The findings from the latest Private Landlords Survey, published by the Ministry of Housing, Communities and Local Government (MHCLG), show that 94% of landlords in England operate as private individuals rather than as part of a company and on average earn £15,000 a year before tax and other deductions.

The research, the first of its kind since 2010, also reveals that for most landlords income from rent makes up 42% of their total gross income, with just 4% relying on buy-to-let as their main business.

Some 45% of landlords own just a single property, 38% own between two and four properties, representing 31% of the sector, while around half of private rented sector tenancies are let by 17% of landlords with five or more properties.

Interestingly, the proportion of landlords with just one property has dropped from 78% in 2010 to 45% or from 40% to 21% of the sector.

Meanwhile, the proportion of landlords with five or more properties increased from 5% to 17% or from 39% to 48% of the sector.

The study also found that more than half - 59% - of landlords are aged 55 years or older and 33% are retired.

Some 70% of landlords have let property for six years or more and the average length of time that landlords had let property was 11.5 years.

According to the survey, 53% of landlords plan to keep the number of rental properties the same over the next two years, with 11% planning to increase the number of properties they own, while 10% of landlords plan to reduce the number of properties in their portfolio.

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Rogue landlord handed £66k fine for operating unlicensed HMOs in Luton

February 7, 2019

Luton Council has successfully prosecuted an unscrupulous landlord for letting three unlicensed houses in which several people lived in squalor.

Zenith Accommodation Ltd and its director Mohammad Mallick, of Ivy Road, Luton, faced charges last week at Luton Magistrates Court of managing Houses in Multiple Occupation at 36 Dorel Close, 79 Cromwell and 3 Cromwell Road, which were not licensed and breaching safety regulations.

Both Zenith Accommodation Ltd and its director were found guilty on all offences, with the company fined a total of £66,741, while Mallick was personally fined £14,661.

As well as operating without a licence, the properties provided dangerous conditions for residents, with a lack of fire doors, lack of fire detection, lack of emergency lighting, damp and insufficient electrical sockets among the many defects identified.

Cllr Tom Shaw, Luton Council’s portfolio holder for housing, commented: “Being a landlord carries with it significant legal responsibilities and this successful action is yet another achievement of our Rogue Landlord Project. This case underlines the council’s ongoing commitment to ensure private tenants in our town have safe, high-quality accommodation.

“In situations like this, dishonest and immoral landlords are not only taking financial advantage of vulnerable tenants, but placing their lives in danger. We will not hesitate to prosecute landlords who show a disregard for the law and their responsibilities towards occupants.”

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PRS should cooperate to raise standards, says property commentator

February 7, 2019

Cooperation has been identified as key to improving standards in the private rented sector (PRS), according to a report by Kate Faulkner, property market analyst and commentator.

The report, commissioned by TDS Charitable Foundation, calls for cohesion between sections of the industry to ensure tenants and landlords are fully aware of their rights and responsibilities.

Faulkner, who runs Propertychecklists.com and consultancy, Designs on Property, echoes the fundamental values underpinning the TDS Charitable Foundation’s goals – that education is key to improving standards in the private rented sector.

The report found that the majority of landlords are well-intentioned although gaps in knowledge can lead to confusion over legal obligations and best practice. Concerns were also raised that while tenants are better at understanding their rights, there is still unease about reporting issues to landlords.

Faulkner commented: “Over the last ten years, the PRS has seen an influx of ‘accidental landlords’ who don’t let professionally, but as a side-line either to supplement their main income or because they couldn’t sell their home during the credit crunch.

“These landlords may not be the stereotypical rogues featured in the mainstream media, however, a lack of knowledge of the extensive legal responsibilities and knowledge can put tenants at risk.”

Faulkner points out that almost one in five (18.2%) landlords surveyed said they find it impossible to keep up with regulation changes, mainly because it can be confusing for landlords who have to navigate national, regional and local legislation.

She continued: “Landlords are not the only party who can be at fault for not understanding their rights and responsibilities. In a survey we conducted to inform this report, we found that some tenant respondents were not aware that if they fail to report maintenance issues, they could be liable for the escalated costs of rectifying the damage.

“There are reports from organisations like Which? and Shelter that vary in their estimations in levels of issues like damp in the private rented sector. Although we can’t tell how common these issues are, it seems clear to me that these issues still exist in the sector partially because not all tenants and landlords are aware of their rights and responsibilities.

“To combat the knowledge deficit and raise standards across the sector, we need to take a more cooperative and cohesive approach to educating everyone in the PRS. The government, tenants and landlord organisations all need to pull in the same direction to make renting more straightforward and safer for everyone involved.”

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Selective licensing set to be extended in Burnley

February 7, 2019

Councillors in Burnley are expected to extend the existing selective licensing schemes in Trinity, Gannow and Queensgate, as well as introduce a new scheme in Daneshouse with Stoneyholme.

Following on from a 12-week public consultation, the council’s executive will almost certainly renew the existing selective licenses in Trinity, Gannow and Queensgate, which are due to expire this year, while also making Daneshouse and Stoneyholme a selective licensing area for the next five years.

The consultation, which included resident and landlord questionnaires, a public event and leaflet distribution, ran from early September, and having considered the results, Burnley Council is of the opinion that selective licensing encourages landlords and residents to work together with the council and other partners to improve areas by tackling anti-social behaviour and crime.

Cllr John Harbour, the executive member for housing and environment, said: “The current schemes in Trinity, Gannow and Queensgate have been successful with moderate rises in house prices, reducing empty properties and anti-social behaviour, such as flytipping, showing a downward trend.

“We want to see that success continue which is why we’re considering building on the success of selective licensing in those areas and looking at proposals to introduce a new scheme in Daneshouse and Stoneyholme so people there can also see the benefits of closer partnership working between the council, private landlords and agents.”

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L&G to launch exclusive holiday buy-to-let product with Leeds BS

February 7, 2019

A new exclusive holiday buy-to-let product has been launched by Legal & General Mortgage Club in collaboration with Leeds Building Society

Legal & General Mortgage Club members will have access to Leeds Building Society’s exclusive holiday let mortgage from tomorrow, and it will be available until 31 May 2024.

The product, available to those looking to purchase or remortgage a property, has a fixed rate of 2.74% with a maximum loan-to-value (LTV) of 70% and a maximum loan value of £500,000. It comes with a fee of £999.

Legal & General Mortgage Club is also launching a semi-exclusive two-year fixed 95% LTV residential product at 3.09% with a maximum loan value of £300,000 and a free valuation and no product fee.

Danny Belton, head of lender relationships, Legal & General Mortgage Club, said: “Legal & General Mortgage Club has a very strong relationship with Leeds Building Society and we are excited to work with them to further strengthen our development in these areas of the market, bringing exclusive products to our key partners.”

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Scottish rents jump 5% in a year

February 6, 2019

Rental prices in Scotland increased further in the fourth quarter of 2018, the latest data shows.

The Scottish national average increased to £771 per calendar month, up 5% year-on-year, and takes just over a month to let at 32 days, amid growing demand for rental accommodation, especially larger properties, as reflected by a 10.9% rise in average rents for four-bedroom properties, according to the latest Citylets Report for Q4 2018.

Gillian Semmler, communications manager at Citylets said: “It has been interesting to note that the largest rises in Scotland’s PRS in recent quarters have been for the larger three and four bedroom properties.

“With an estimated 90,000 families in Scotland, representing around a quarter of the rented sector, the PRS has become a significant tenure for adults with children.”

Edinburgh

Rents in Edinburgh once again moved upwards recording a substantial 7.8% annual rise to £1,095 per month. Tenants will almost certainly experience a continuing rise over the course of 2019, however, it remains to be seen if this return to over 7% growth will be sustained.

The steepest rise was recorded for four-bedroom properties at 10.3% Y-O-Y and 48.6% on the 10-year view. Overall Edinburgh has recorded 6.5% growth over five years and 4.3% over ten. The market continues to move very quickly with an average Time to Let (TTL) of just 23 days.


Glasgow

The private rented sector in Glasgow continues to experience strong demand with larger properties, as per Edinburgh, recording the largest gains. Overall, rents in the city rose 3.9% as at Q4 2018 to average £771 per month.

With Aberdeen continuing to fall, the gap between Scotland’s largest city and the Granite City widened to £56 per month and is expected to widen further in 2019. The market is moving swiftly at 25 days on average with one and two bedroom properties in particular letting quickly at 20 and 25 days on average.

 

Aberdeen

The North East posted several positive economic indicators for 2018 such as office space uptake, but as yet this has not fully stabilised the rental market.

Rents continued to ease down in Q4 2018 at minus 5.3% Y-O-Y, however, this remains in the 3-6% range that has characterized 2018. Property to lease in Aberdeen now averages £715 per month.

Whilst falls have been steep in recent years, from the 10-year view the Aberdeen rental market averages just minus 1.8% per year on the whole. Three-bedroom properties recorded a 2% rise over the year to average £972. Time to Let in the region remains high at 53 days.


Dundee/West Lothian

Dundee had a strong end to 2018 with annual growth of 4.7% and continuing a year that saw positive annual growth throughout. Properties are also renting faster at just 25 days and it remains to be seen whether this represents a step change in a hitherto predictable and stable market. Two thirds of Dundee properties now let within a month with an average rent of £578 per month.

Property to rent in West Lothian again recorded positive annual growth, up 5.1% Y-O-Y to average £699 a month, with a substantial reduction in TTL to 26 days- 13 days faster than the previous year.


Adrian Sangster of Aberdein Considine, said: “2018 was very much a year of transition for the Scottish PRS. Agents, landlords and tenants were continuing to adapt to changes brought about by the new PRT, which went live at the end of 2017. Agents also had to prepare for the introduction of the Letting Agent Register during Q4.

“Any agent who has not applied and continues to trade, does so illegally. Therefore landlords and tenants need to carry out due diligence to ensure the agent they’re using is fully compliant. All this took place at a time when more landlords left the sector in part due to the phased tax changes announced in the 2015 UK budget.”

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How much is the average tenancy deposit?

February 6, 2019

The cost of average deposits has increased across the UK, according to the latest Statistical Briefing report by The Dispute Service (TDS).

The report highlights the increasing average value of deposits and number of deposits protected in England, Wales, Scotland and Northern Ireland, but there are regional differences in tenancy deposits.

The average deposit value in England and Wales is almost double the level in Northern Ireland, although it is worth pointing out that significantly higher deposits in London distort the overall picture.

According to the TDS, the average deposit in England and Wales in 2018 was £1,110, while in Northern Ireland the average was £587. The Scottish average sits in the middle ground at £675 for 2018.

Across the UK, the average value of tenancy deposits increased between 2017 and 2018 by; 2% in England and Wales, 1.5% in Scotland, and by 1.4% in Northern Ireland.

As well as the average values increasing, the number of tenancy deposits protected has also risen year-on-year across the UK.

In England and Wales, there are 3,748,725 protected deposits, up almost 1.6% from 3,691,242 a year earlier, while in Scotland an additional 9,441 deposits were registered between 2017 and 2018 – an increase of almost 4.7% year-on-year.

Northern Ireland experienced the largest growth in the number of tenancy deposits protected year-on-year; an 8.97% uplift from 49,102 to 53,510.

Steve Harriott, chief executive officer at TDS, commented: “While the report highlights broad differences between the constituent countries of the UK, it hides more local disparities. For example, the average deposit value in England and Wales does not reflect the difference between central London and areas with lower average deposits.

“The report does, however, demonstrate that the private rented sector is continuing to grow, with an increase in the number of deposits protected and their value across the UK.

“There are, of course, a number of reasons behind the growth, but as the sector expands, we continue to see the numbers of deposits protected increasing.”

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A fifth of millennials forced to leave rental home due to change in ownership

February 6, 2019

Many tenants face the uncertainty of potentially having to find a new home as a result of a change in ownership, with a fifth of millennials - 21% - having already been forced to leave their rented accommodation before they were ready because their landlord wanted to sell their property vacant.

The research from online property marketplace Vesta Property claims that 39% of millennials fail to understand exactly what their rights are as tenants when their landlord sells, while 32% somewhat surprisingly did not know that tenants could be legally served notice to vacate even if they have done nothing wrong.

The study indicates that most private renters would prefer to stay in the property regardless of change in ownership, with 77% of tenants’ surveyed saying that they want the option to stay in their home even if their landlord sells to another buy-to-let investor.

Russell Gould, CEO Vesta Property, said: “The current buying and selling system, where good tenants are evicted for no reason other than to sell a property, makes life harder for everyone. 

“Buyers have to find new tenants, sellers can lose valuable income and renters are forced to disrupt their lives by finding new accommodation.

Vesta last year launched a digital property marketplace enabling landlords to offer properties for sale with ‘tenants in place’, ensuring that sellers earn all the way to completion, while buyers earn rental income from day one, and tenants avoid disruption to their lives. 

Gould added: “The sector needs to move with the times and mould the system into something that works for both landlords and tenants alike. Specifically, the practice of advising a landlord to evict tenants in order to sell a property is outdated.

“The sector needs new models such as Vesta that offers tenants-in-place during the sale process thereby satisfying tenants who want to keep their home and landlords who wish to sell.”

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Automated feeds service allows landlords to target potential student tenants

February 6, 2019

Accommodation for Students (AFS) has launched a new automated feeds service for buy-to-let landlords and letting agents, enabling them to instantly connect with a large pool of potential student tenants in the UK.

The new feeds service, which is city based, enables landlords to specifically target student tenants by uploading multiple properties in any format in real time, with landlords currently able to list properties on the AFS portal for an introductory offer of £99 per month.

Previously, letting agents and landlords using the AFS portal to advertise their student properties were required to upload properties manually and login to deactivate them when they were no longer available, due to the absence of an automated property feed.

Simon Thompson, director of accommodation for students, said: “We have been working on launching this service for a very long time, but previous attempts had to be taken offline because they were not functioning correctly.

“We now have it working seamlessly with excellent results. It’s also really good news for the three million students that visit the AFS portal every year because they know that the property they are looking at is the most up to date inventory of available properties.”

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New 5-year fixed expat buy-to-let product launched by Marsden BS

February 6, 2019

Marsden Building Society has launched a new five-year fixed expat buy-to-let product for landlords looking to buy or remortgage a buy-to-let property in the UK whilst living overseas.

The five-year expat buy-to-let product, which is available at a rate of 4.24%, has been launched in response to greater demand in the market, according to Steve Robinson, head of lending at the Marsden.

He said: “We’ve done a full refresh of our mortgage range and reviewed where our lending solutions support intermediaries best.

“As part of this, we’ve introduced a five-year fixed expat buy-to-let product to meet a growing demand in this market.”

Marsden Building Society has also added new products across older borrower, retirement interest-only and residential ranges.

There’s also a combination of changes to term end dates.

Robinson added: “Following feedback from brokers looking for an alternative to bridging, we’ve introduced a product with a maximum of 2-year product term on interest only and has no early repayment charges which is available up to 60% LTV.

“We were finding many intermediaries looking for options for their clients who are in the process of buying and potentially need a short-term mortgage. This is a new initiative that we’re trialing in the market and welcome feedback from brokers and their clients.”

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Five trends that are are set to dominate the PRS over the next six years

February 5, 2019

A new multi-housing report reveals five trends that are set to dominate the private rented sector between now and 2025.  

The report, compiled by Knight Frank, reveals the following trends in the PRS:

+ As demand for privately rented homes continues to grow - an additional 560,000 households are expected to be living in the private rented sector by 2023. This takes the total proportion of the housing market to 22%, up from 20.6% today

+ Knight Build-to-rent (BTR) homes are increasing, but starts that more are needed. There are currently 29,416 professionally-managed PRS units completed, and the current supply pipeline of BTR units under construction or in planning is 110,092.

+ Individual buy-to-let landlords are exiting the market – mortgage data shows that the number of new mortgages taken out by landlords has fallen over the last two years

+ Home ownership rate declines further – the proportion of households who are homeowners is declining (although the overall number of homeowners is rising, as the population increases.)

+ Increase in provision of social housing - provision of social/affordable housing will increase over the next five years as a response to looser lending rules for councils, new government funding for social housing and increased activity of Registered Providers in the land market in recent years.

The latest research from Knight Frank suggests that in the region of £75bn of investment will be committed to the professionally-managed PRS by 2025.

Overall, more than 10,000 people across the UK responded to the Tenant Survey, conducted for Knight Frank by YouGov. The report reflects the views of 5,000 people living in the private rented sector across the UK. For the first time, the survey also includes 5,000 homeowners, allowing the study to draw conclusions on the differences between homeowners and renters.

Some of the key findings include:

+ Young professionals (aged 25-34) no longer make up the largest group living in the PRS, having been overtaken by 35 to 49 year olds (but only very slightly). This age group is also expected to show the biggest growth in households in the PRS over the coming years, with difficulty in obtaining a mortgage deposit to buy a home remaining a hurdle

+ Affordability remains the key priority for 61% of tenants when choosing a property. More than one in ten tenants said renting allowed them to live in an area they could not otherwise afford

+ Location is the second biggest priority for tenants(23%) followed by the size of the property (10%)

+ Lack of a mortgage deposit remains key driver for renting, though this ranges from 71% of young families to just 41% of iGens (those aged under 25)

+ On average, 69% of tenants still expect to be renting in three years’ time, rising to 93% for Baby Boomers (aged 65+)

+ Tenant priorities are more focused on ‘internal’ factors – amenity within an apartment – than ‘external’ factors – such as local shops.

Knight Frank spoke with more than 25 of the largest funders and developers of purpose-built PRS and Retirement Housing to gain insight into how the market is set to develop:

+ 38% of respondents said they wanted to engage in providing “cradle to grave” housing, i.e. student housing right through to Housing with Extra Care for older people.

+ In five years’ time, 56% of investment will be outside London (up from current levels of 44%)

+ The average net yield for professionally-managed PRS properties is expected to settle at around 3.9% in 2022

Nick Pleydell-Bouverie, head of residential investment agency, commented: “We are seeing a significant number of individual private buy-to-let landlord exiting the market as the Government’s buy-to-let tax changes start to bite. Large-scale professional PRS landlords are well placed to absorb this, as well as satisfying some of the structural shortfall in our housing supply.

“A principal constraint on the delivery of housing is the estimated rate of sales for developers. The Institutional PRS market can significantly accelerate this through near immediate absorption. It is crucial that the UK government resists further legislation and taxation and enables the PRS market to significantly contribute towards the UK housing challenge.”

 

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Section 8 delays force many landlords to serve Section 21 notices instead

February 5, 2019

Section 8 delays are leaving more than half of landlords with no alternative but serve Section 21 notices, according to new research.

The survey carried out by Landlord Action revealed some interesting facts when it comes to the reasons landlords serve Section 21 notices, with 73% of those who responded stating that they have had to serve a Section 21 notice, most commonly due to rent arrears.

More than half - 56% - have used Section 21 because their tenant was in rent arrears.  According to the data collected, there were no other common specified reasons for landlords to use it, with 22% of landlords simply selecting ‘other’.

Other specified reasons for using a Section 21 included tenants requesting their landlord obtain a possession order (10%), landlords needing to refurbish the property (5%) or sell it (4.5%). Just 2% wanted to move back in themselves and only 0.6% said it was because the tenant had complained about disrepair i.e. ‘Retaliation Eviction’.

Critics are calling for Section 21 evictions to be banned, arguing that they tilt the balance of power towards landlord. But the study found that Section 21 is absolutely crucial in terms of supporting landlords, and it has been suggested that without it, many landlords may leave the sector for fear they have no power over their own property.

Paul Shamplina, founder of Landlord Action, believes many of these ‘unspecified’ reasons, along with rent arrears, could be pursued under Section 8 but landlords are forced to rely on Section 21, even when there is a breach of tenancy, because they have very little faith in the court system.

He commented: “Not only is using Section 8 already more time-consuming, tenants can delay the process further for landlords by counter-claiming.

“In addition, discretionary grounds of Section 8, such as anti-social behaviour, can be extremely difficult for landlords to prove, meaning it has a lower success rate. It’s clear from the survey that landlords need to be able to get their properties back as soon as possible and are willing to forfeit arrears by using Section 21.”

Interestingly, 43% of landlords said their tenants vacated the property when served with a Section 21 notice, but 42% had to go to court to obtain possession. The government has put forward a consultation on a proposed introduction of a specialist “Housing Court”. 

It believes this will provide greater access to justice for both landlords and tenants and give landlords confidence to offer longer, more secure tenancies by making it easier for responsible landlords to regain possession of their tenancy, should they need to. 

However, as part of this, Shamplina predicts that the use of Section 21 is going to be heavily diluted and is concerned that without major reform to the Section 8, some landlords will exit the market. 

He added: “Section 21 gives landlords and mortgage providers the reassurance and flexibility to recover their asset if they need to. To abolish it, or even dilute its current use as has been suggested, will require significant reform to Section 8 which offer reassurances to landlords that if they had to use the Section 8 route under grounds for rent arrears, moving back into the property or selling it, there would not be significant delays in the court process. 

“With this, we are likely to see a further cut to supply of rental properties as landlords will consider buy-to-let too great a risk.”

Landlords should be aware that the recent announcement that the Tenants Fees Ban will come into force from 1st June this year will also affect the use of Section 21. After this date, if a landlord or letting agent makes a charge that relates to a banned fee, they must return this within 28 days, or it will render a Section 21 ineffective.

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‘Mixed picture’ for BTL mortgage rates

February 5, 2019

The average cost of three out of six categories of fixed rate buy-to-let mortgage has increased over the past month, while the remaining three categories have fallen in cost, according to the latest research from online mortgage broker, Property Master.

The digital start up, which uses algorithms to match the requirements of individual private landlords against the entire buy-to-let mortgage market, reports that five-year fixed rate mortgages, which have been steadily gaining in popularity amongst buy-to-let landlords, remain the best value for landlords with falls in cost year-on-year of up to £24 a month. 

Property Master’s February 2019 Mortgage Tracker shows five-year fixed rate offers for 65% and 75% of the value of a property are all down year-on-year. Savings for each of these mortgages respectively were £24 and £15 per month. 

The cost of most two-year fixed rates tracked were up year-on-year with the cost of a two-year fixed rate for 50% of the value of a property up as much as £40 per month.

The Property Master Mortgage Tracker follows a range of buy-to-let mortgages for an interest only loan of £150,000.  

Deals from 18 of some of the biggest lenders in the buy-to-let market including Barclays, BM Solutions, RBS, The Mortgage Works, Godiva and Precise (full list below) were tracked.   Figures for this month’s Mortgage Tracker were calculated on deals available on February 1, 2019.

Angus Stewart, Property Master’s chief executive, said: “Brexit continues to cloud the outlook for interest rates, but many commentators are pencilling in a move upwards in May.  The situation is more confusing still for landlords given that it is the start of the year and there is a flurry of new deals out from lenders – some better than others.”

He added: “Landlords shopping around need also to remember some lenders set higher interest cover ratios, requiring rents to cover at least 145% of their mortgage payments. 

“Others are wary of lending to landlords with more than three properties.  Then there is the need to factor in product fees which our research shows can average between £658 and £1,212.  Property Master’s advanced algorithms live search for our customers matching their individual requirements against the lending criteria of 97 lenders.”

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Landlord ordered to pay over £7,500 for safety hazards

February 5, 2019

A landlord who failed to install a proper heating system and left safety hazards across a house in Peterborough has been ordered to pay more than £7,500 in fines and court costs.

Brian Searle was found guilty at Peterborough Magistrates’ Court of failing to comply with two Improvement Notices ordering him to carry out extensive remedial work to a semi-detached house in Limetree Avenue, Peterborough, PE1.

Having found several problems at the property, including serious disrepair, a lack of modernisation and no proper heating system in place, Peterborough City Council’s housing enforcement team served the landlord with notices to bring the house up to required housing standards set by the authority.

The council served Improvement Notices on Searle in June 2017 which required remedial works to be completed by August 2017.

But the landlord chose not to make the necessary amends to the property, which was also without a fire alarm, despite the fact that the house was occupied by a single adult male who was known to have ill health and limited mobility.

Searle, of Lincoln Road, Peterborough, was fined a total of £2,500 for the offences, ordered to pay full council costs of £4,896.12 and a victim surcharge of £170, bringing the total amount to £7,566.12.

But Searle chose to appeal to the Residential Property Tribunal (RPT) in June 2017 and a date set for a hearing was scheduled for September 2017. At the hearing, the RPT upheld the Improvement notices but varied the date for compliance to January 9 2019.

Peterborough Magistrates’ Court heard that Searle had failed to comply with the Improvement Notices by the revised date set by the RPT.

Cllr Peter Hiller, Peterborough City Council’s cabinet member for housing, said: “This case demonstrates our zero tolerance stance towards landlords and letting agents who fail to meet their legal obligations. Such cases seriously impact on the everyday lives of those who have to live in such appalling conditions. Whenever we obtain evidence of landlords breaching legislation, we will look to prosecute where possible.”

Peter Bezant, senior housing enforcement officer at Peterborough City Council, added: “The vast majority of landlords and agents are law abiding and we want to assure them that we will continue to drive up standards and seek out any rogue landlords who think they are above the law.

“Our team continues to work with landlords and agents to ensure that their properties meet current housing standards and to support and educate those who may need guidance on best practice in property management.”

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Portico launches short-term letting services in Manchester and Liverpool

February 5, 2019

Portico has expanded its short-term lettings service, bringing its Airbnb services to Manchester and Liverpool’s high streets.

The estate agency, which currently has 17 high-street offices throughout zones 1-4 in London, has tied up with local coffee shops to bring short-term letting services to landlords and property management to Airbnb hosts in the North West of England in a more relaxed setting.

Properties listed with Portico will be available on the Airbnb website, managed by dedicated Portico account managers.

The move is designed to help private landlords in Manchester and Liverpool maximise income from their investment properties at a time when they are set to be hit with increased taxes and costs.

It will also make Airbnb a more accessible option for homeowners interested in earning additional income through short-term lets.

Portico’s new business director, Fiona Patterson, said: “It’s no secret that the lettings industry is evolving, and at Portico, we intend to change with it.

“After the success of Portico Host in London and our appointment to the Airbnb professional co-host programme, it seemed only natural to bring our award-winning service to the best place for landlords to invest in the UK. Liverpool and Manchester share a vibrant Airbnb and letting market, enabling Portico landlords to achieve better yields for their properties.”

Liverpool and Manchester are among the best places to invest in property in the UK at the moment, in terms of the return long term investors can achieve.

In certain parts of Liverpool, landlords can expect to achieve a rental yield of circa 9-10%, whilst in Manchester, landlords can expect to achieve a yield of 6-9%.

This new venture will be led by Rachel Dickman, who joins the team as Portico’s regional manager for the North West.

Dickman, an industry veteran with experience working with property agents such as YOPA and Countrywide, commented: “This is an exciting time to be in the property industry. The North West is a natural next step for Portico Host, as Airbnb short term rentals generated over £37m in revenue in 2018 alone, according to Airbnb’s most recent insight report, and boosted the overall UK economy by £3.5 billion. I look forward to bringing Portico Host to the North West’s vibrant marketplace.”

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Spike in landlord exodus in London

February 4, 2019

There was a significant increase in the number of landlords exiting the rental market in December 2018 as rents increased for many tenants, according to ARLA Propertymark

The letting agent professional body reports that letting agent branches in London saw an average of six landlords sell their properties and exit the market in December.

This compares to a national average of four and double the number of landlords selling up in the North East, East Midlands, West Midlands, East of England and the South West, where agents reported three sales per branch.

David Cox, chief executive, ARLA Propertymark: “Over the last few years, landlords across the country have been pushed out of the market by increasing costs and legislation, and new investors have been deterred from entering.

“Last month’s PRS results show that the issue has particularly intensified in the capital which may be the result of landlords starting to receive their first tax bill incorporating the increase in taxes from the Mortgage Interest Relief changes which came into force last tax year.

“If this trend continues, coupled with the Mayor of London, Sadiq Khan’s, recent pledge to introduce rent controls, it will only serve to make the situation worse for London’s renters as more landlords are forced to sell up.

“As the supply of rental accommodation falls further, tenants will face more competition for properties, which will push up rents on good-quality, well-managed properties, and leave the vulnerable and low-income people which rent controls are designed to help, in the hands of rogue and criminal operators.”

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Discrimination against tenants on benefits?

February 4, 2019

Shelter has recently run a campaign aimed at banning ‘discrimination’ against tenants on benefits in the private rented sector, presenting a complex issue as though it were black and white. This was even picked up this week in a report by the Institute for Public Policy Research as something which should be legislated against.

 

As a landlord, however, who is running a business and not a charity, I believe landlords should be able to choose which tenants they accommodate - within the bounds of the law, which currently does not include being on benefits as a protected characteristic and should not do so for many reasons. Landlords must be allowed to mitigate their risks; and a charity like Shelter which houses no-one, but constantly slags off those of us who do, should not have a role in dictating how housing providers assess affordability, under threat of litigation. 

 

It is of course easy for a third party to tell someone else to take risks that it does not and would not itself take. Shelter’s employees and directors do not face having their livelihood put at risk; they get paid whatever decisions they make in the course of their work. On the other hand, full-time landlords whose profit is their salary do not have the luxury of still receiving this salary if they take or are forced to take additional risks when deciding whom to trust enough to hand over the keys to their expensive assets. 

 

In this context, it was ludicrous of Greg Beales at Shelter to state that tenants on benefits pose no more risk than say a couple in full-time employment. Of course they do.

 

For example, last year we heard of a case where the landlord potentially faced having to pay back four years Housing Benefit as the tenant had claimed it fraudulently. What other business would take a risk like that? The landlord would not face this risk if they accommodated only people not on benefits. Shelter has no answer to this point.

 

In fact, landlords face numerous problems in housing the lowest income tenants, and there are exacerbating problems when they are in receipt of benefits.

 

The following landlord who has often accepted tenants on benefits sums up many of the issues: 

 

‘What about if Universal Credit is stopped because of something the tenant does? The landlord cannot control the tenant’s behaviour. What about when tenants spend the rent on other things – as some of my tenants have done? Or when they are overdrawn at the bank and the benefit is swallowed up?

What about when things go wrong and there is no guarantor? I’ve had tenants cause thousands in damage and arrears – I can’t get a penny back when they’re not in a decent job where I could get an attachment of earnings if they were working. What about when the council and charities like Shelter and the Citizens Advice Bureau tell tenants to stay put for several months, even when they are not paying the rent and their notice has expired?

 Again, landlords lose thousands. And unless the tenant gives permission, the Universal Credit employees won’t even talk to the landlord, who is paying the mortgage and all the maintenance costs, insurance and so on.  And in the meantime the charities support even terrible tenants against decent landlords – they assist these criminals in ripping us off, giving them free legal advice and representing them in court – always looking for loopholes, tiny issues with paperwork, to keep them even longer in the property, whilst the landlord can get further and further into debt.’

 

Of course, Shelter also supports the government’s tax assault on landlords which has seen many face huge increases in their tax bills. Portfolio landlords who have until recently had large portfolios of relatively cheaper properties, with large amounts of mortgage interest to pay, who have specialised in housing those on benefits are pulling away from this market; not only because of the tax assault, but also because of constant criticism of them for ‘taking tax-payers’ money’ in the form of Housing Benefit.

 

If Shelter wants private landlords to return to this sector, they should be taking the diametrically opposite approach to the nasty, litigious one they have initiated. What about them campaigning against Section 24, arguing for a public body to indemnify landlords against the additional losses and risks associated with riskier client groups? That would be of real value to tenants who because of government and charity interference, now face the possibility of not finding anywhere to live.

 

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Hamilton Fraser acquires NLA’s TDSL shares

February 4, 2019

Hamilton Fraser has acquired the National Landlords Association’s (NLA) Tenancy Deposit Solutions Ltd (TDSL) shares, enabling the firm to take full ownership of the organisation, which runs mydeposits, one of the three government-approved tenancy

Hamilton Fraser will now integrate TDSL more closely into its wider group operations. 

Hamilton Fraser and mydeposits CEO, Eddie Hooker said: “Hamilton Fraser and the NLA have always sought to do what was best for mydeposits and its customers.  Bringing mydeposits more closely within Hamilton Fraser, therefore being able to utilise common operational functions, will enable us to enhance our service and build the business further.  While the NLA will no longer be directly involved as a shareholder, it will continue to support mydeposits and promote it to its members.

“In addition, as the private rented sector enters a phase of significant evolution, we hope this move will also highlight to tenants and landlords our commitment to moving towards being a completely independent enterprise which supports both landlords and tenants equally.

“We look forward to continuing our relationship with the NLA as their insurance partner through NLA Property Insurance.  I have no doubt that as the private rented sector continues to evolve, between us we will find new ways to work together to support landlords.”

Given that mydeposits is working in a highly competitive market, it needed to develop and invest to meet that challenge, according to NLA chairman Adrian Jeakings.

He commented: “mydeposits is working in a highly competitive market, and needs to develop and invest to meet that challenge. The NLA board thought it was important that we removed anything which might impede mydeposits’ future success. 

“The 20-year long partnership between Hamilton Fraser and the NLA remains strong.  As part of the sale agreement, mydeposits will continue to be the NLA’s preferred tenancy deposit scheme, and NLA members will continue to enjoy a 30 per cent discount on mydeposits’ protection prices.”

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Kent Reliance makes changes to buy-to-let range

February 4, 2019

Kent Reliance’s buy-to-let maximum loan limit has been cut to £750,000, down from £1m, while the lender has removed its three-year fixed rate product fee.

Kent Reliance’s minimum loan size has been reduced to £50,000 for specialist buy-to-let, including limited companies and houses in multiple occupation (HMO).

However, multiple units on a single freehold still have a £75,000 minimum loan.

Adrian Moloney, sales director, OneSavings Bank, said: “As the leading specialist lender, we’re constantly adapting and fine tuning our mortgage proposition to ensure it remains relevant and reflects the needs of our broking partners.”

It is worth pointing out that Kent Reliance has also made changes to its core residential mortgage range, with its near prime maximum loan limit increased from £500,000 to £1m for all ranges.

Loans over £500,000 will be subject to maximum of 80% loan-to-value (LTV). Interest-only asset-backed loans are now available for property values of £500,000 and a minimum loan of £50,000.

Moloney added: “These product changes, especially the large loan reduction to £750,000 and the reduction in minimum loan size to £50,000, shows that we have the appetite and ability to offer varied complex solutions for specialist brokers throughout the UK and not just the South East.”

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Cost of renting in the private sector falls

February 1, 2019

The proportion of income spent by private tenants on rents in England has continued to fall, according to an official report on the state of the country’s housing.

Figures in the latest English Housing Survey, based on research in 2017-18, show that tenants paid an average of 32.9% of their income in rent, down from 34.3% in the previous year and from 36.4% in 2014/15.

The report, which is the most comprehensive snapshot of England’s housing stock and how people are living in it, also found that the average length of time a private sector tenant had lived in their existing home was up from 3.9 years in 2016/17 to 4.1 years in 2017/18.

The government’s new Private Landlord Survey for 2018, also published yesterday, shows that 70% of landlords kept their rents the same when they most recently renewed a tenancy showing that landlords prioritise keeping good tenants for a long term.

However, overcrowding in the private rented sector is on the up, with more than 250,000 said to be living in overcrowded private rented housing, which is the second highest level recorded since 1996, the English Housing Survey revealed.

The official figures show that overcrowding is a growing problem in general, owed to the shortage of properties.

Social housing has increased to the highest level since government records began 24 years ago with more than 300,000 households in England squeezed into too few rooms, the data shows.

Overcrowding rates are now eight times higher in social housing and six times higher in private rented accommodation than among owner-occupiers.

The research also reveals that 14% of private rented homes have “category one” hazards, compared with 6% rented from councils or housing associations. Overall, however, the standards of homes are improving. In 2008, 31% of dwellings in the PRS failed to meet the government’s decent homes standard.

John Stewart, policy manager for the Residential Landlords Association (RLA), commented: “What emerges from the wealth of data out today is a picture of continuing improvement in affordability, security and standards for private tenants. 

“The figures also debunk the myth that landlords are always increasing rents unreasonably and looking for every opportunity to evict a tenant.

“We recognise that whilst this data confirms that the vast majority of landlords enjoy good relationships with their tenants and want them to stay on long term, there are still too many unscrupulous landlords who bring the sector into disrepute and they should be driven out of the market.”

 

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Affordability is the most important factor for private tenants, study finds

February 1, 2019

Affordability is the overriding priority for renters of all ages when looking for private rented accommodation, according to a survey of more than 2,000 tenants across the UK.

Almost two thirds of those who took part in the UK Tenant Survey said that affordability was their main concern when compared to location or space in the property.

The research conducted by Intus Lettings, which aims to present a clear picture for landlords of which characteristics could make a property stand out to would-be tenants, found that young renters in particular are more than four times as likely to prioritise finding a cheap rental home than one with access to nightlife, shops and restaurants.

Just 8% of renters prioritised nearby amenities, bars and restaurants or public transport links as a driving force behind their decision on a tenancy, compared to over 40% naming low costs as the most important factor.

In terms of individual features of a home, the most frequent characteristic which renters look for is outdoor space, with almost half - 46% - identifying a garden, terrace or balcony as the feature they would desire most in a property.

Meanwhile, over 40% of renters would be deterred by a property without a parking space, while almost a quarter of respondents - 24% - were put off by dated interiors.

Hope McKendrick, lettings manager at Intus Lettings, commented: “Our figures seem to suggest that renters first and foremost seek practicality over certain features which have traditionally been seen as desirable – especially to younger tenants - such as nearby shops and restaurants or a vibrant nightlife.

“With high rental costs across the UK, many young renters may be forced to prioritise a property which works around their budget and daily routine, as tenants flock to homes which provide ample parking or easy access to city centre jobs or studies.”

Hope added: “We’re seeing a clear trend towards a generation of practical renters – those looking for a convenient, modern-feeling home rather than exciting but potentially costly surroundings.”

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Private landlords and letting agents need to stick together

February 1, 2019

The so-called housing charity, Shelter, targeted Ludlow Thompson a few months back, asking its supporters to block the letting agent’s telephone lines so that they could not go about their normal business.

Shelter accused the agent of ‘discrimination’ against those on benefits. At the time, many landlords felt Shelter's actions were deplorable and the new Landlord Alliance – which, since its inception, has attempted to combat Shelter’s many attacks on private landlords - wrote to Ludlow Thompson to offer support.

In addition, many landlords spoke up on various forums to defend the lettings agency against Shelter's ill-informed and wrong-headed attack.

Given this support from landlords, it has therefore been galling this week to see a director of Ludlow Thompson, Stephen Ludlow, referring to private landlords receiving £7bn in ‘tax relief’ on mortgage interest implying that landlords are doing really well and receiving this ‘gift’ of relief from the government.

Unfortunately, this plays right into the hands of Shelter and other anti-landlord organisations and individuals.

In fact, landlords do not receive ‘tax relief’ on finance interest; this is a misnomer which has facilitated the Treasury's attack on landlords and is completely false. As the Institute of Chartered Accountants of England and Wales, the Institute of Fiscal Studies and common sense confirm, it is unjust, absurd and unsustainable to tax a business without allowing it to offset the costs of creating that profit.

Finance interest is often the main cost of the business. Removing this does not remove a relief, it contravenes generally accepted accounting practice and effectively imposes a tax on non-existent profit.

As landlords, we were able to recognise that Shelter’s accusation that Ludlow Thompson and other agents and landlords ‘discriminate’ against those on benefits was weak and ill-conceived. It would have been nice to have this understanding reciprocated, especially as landlords are letting agents’ main ‘paying’ client group (even more so with the tenant fees ban coming in).

Given this, agents would do well to be more circumspect in the future and not misrepresent the government’s heinous tax treatment of private landlords.

Dr Rosalind Beck is a property writer and landlord based in South Wales. You can read her latest report by clicking here

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New petition calls for pet damage insurance to be paid by tenants with pets

February 1, 2019

Landlords and tenants are being urged to sign a new online petition calling for the government to better support tenants with pets, ahead of the introduction of the tenant fees ban.

Many pet-owning tenants have a tough time finding a suitable rental home, as few landlords embrace the idea of a pet in their property.

The reasons are understandable given that some animals, such as dogs, can be noisy, smelly and destructive.

However, it is argued that the Tenant Fees Bill is leading the nation of tenants and animal lovers to disaster and will find tenants with pets at an even greater disadvantage against those without as a result of the intention to ban landlords and letting agents from asking tenants to purchase insurance to cover the pet damage in rented property, which is why the petition has been launched.

You can view and sign the petition by clicking here

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Top tips to help prevent carbon monoxide poisoning

February 1, 2019

One in three Brits are at risk of from carbon monoxide poisoning this winter as they do not have a CO alarm in their home, according to new research from Energy UK’s ‘CO Be Alarmed!’ campaign.

The findings are surprising given that 94% of the 2,000 people surveyed for this study said that they are aware of the risk of not owning a CO alarm.

The study suggests that people living in Liverpool are most at risk, with almost half - 47% - saying they did not have a CO alarm.

Norwich, Manchester and Leeds are also among the top ten cities most at risk with over 40% saying they do not have a CO alarm.

Although gas safety checks have long been in place in the private buy-to-let sector, carbon monoxide alarms are only required by law wherever there are solid fuel appliances.

However, given that carbon monoxide can be omitted from everyday household appliances, such as poorly maintained or faulty boilers or gas cookers, many landlords opt to provide their tenants with carbon monoxide alarms, regales of whether there are solid fuel appliances.

Carbon monoxide is known as the ‘silent killer’ because you can’t see it, smell it or taste it, which is why it is so important to have an audible carbon monoxide alarm installed.

An estimated 30 people die and a further 4,000 are hospitalised annually from carbon monoxide poisoning in the UK. But many experts believe that the true number is likely to be much higher as the symptoms can easily be mistaken for flu or tiredness.

Abbie Sampson, director of external affairs at Energy UK, commented: “As snow sweeps the country and people turn up their heating, it is worrying that one in three people don’t have a life-saving CO alarm which, for around £15, could protect them from this silent killer.

“Follow our simple ABC checklist to stay #COsafe – check you have an Alarm, test the Batteries and make sure you have had an up-to-date gas Check. And, if you are checking in on older relatives or neighbours, make sure you check that they have an audible CO alarm installed – it could save their life.”

The CO ‘Be Alarmed!’ campaign highlights some simple steps you can take to make sure you and your tenants stay safe from carbon monoxide poisoning this winter:

+ Buy and install an inexpensive carbon monoxide alarm - you can get them from DIY stores, high street shops and online - just make sure you check for the safety marks;

+ Like a fire alarm, check it regularly and make sure the batteries are working;

+ Just like your car, it’s important to have your gas appliances, like your boiler and cooker, serviced regularly;

+ If you’re renting your landlord must ensure this done for you every year by a Gas Safe Registered engineer;

+ Be aware of the symptoms of CO poisoning – which included headaches, nausea and dizziness and similar to a common cold or the flu; and

+ And finally make sure you have good ventilation from fires and stoves and if you have a chimney make sure it is swept once a year.

Top 10 cities most at risk from CO poisoning

Percentage of people saying they didn’t have a CO alarm

Liverpool

47%

Norwich

44%

Manchester

42%

Leeds

42%

Nottingham

39%

Belfast

39%

Plymouth

38%

Birmingham

37%

Newcastle

36%

Bristol

35%

 

 

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How will a disorderly Brexit affect your property investment strategy?

January 31, 2019

A no-deal Brexit could trigger a deep and damaging recession with worse consequences for the UK economy than the 2008 financial crisis, the Bank of England warned last year.

The central bank fears that failure to reach a deal with Brussels – with no transition period to a new trading relationship – could spark an immediate economic crash, with GDP falling by up to 8% this year, the unemployment rate increasing to about 7.5%, interest rates surging to 6.5%, and property prices crashing by up to 30%.

But having already been criticised by respected economists Paul Krugman, a former winner of the Nobel prize in economics, and Andrew Sentance, a former member of the Bank’s interest rate-setting committee, the gloomy figures - certainly as far as house prices are concerned - have been broadly rejected by a number of leading property firms, including RICS, which dismissed the Bank’s prediction in the event of a disorderly Brexit as “implausible”.

However, there are still plenty of gloomy forecasters predicting that property prices will fall in the event of no deal Brexit, with some forecasting a double-digit drop in values.

Paul Smith of Touchstone Education commented: “When the Bank of England Governor, Mark Carney, warned last September that a disorderly Brexit could send house prices crashing by a third, many people dismissed his comments as the latest instalment of Project Fear.

“Forecasts of economic doom caused by Britain exiting the European Union are viewed very differently depending on which side of the argument you fall.

“Even those who balk at predictions of financial Armageddon will have taken note of some figures published this week suggesting that the political uncertainty surrounding Brexit has helped to push transactions in central London to their lowest in a decade.

“While property markets elsewhere in the UK have remained steady and, in the case of much of Scotland, appear to be booming, the current political deadlock has posed some important questions for investors.”

While politicians continue to debate about what sort of Brexit they want, some people are trying to buy and sell homes, with Rightmove reporting that viewings are up on this time last year.

But Smith points out that there still several underlying issues of concern in the property market, namely that  prices are high relative to earnings and that interest rates are rising, compounded by exacting mortgage-market conditions.

He continued: “While the costliermarkets, in London and the south-east, continue to underperform we don’t appear to be facing a crash. Not yet, anyway.

“A disorderly Brexit may change all that and the gloomier forecasters predict prices might fall by 10% or even higher if we leave the EU without a deal.

“Homeowners looking to move might, perhaps think about delaying their decision until the current impasse has been resolved, but for people who make their living from buying and selling properties, holding-off may not be an option.”

To help guide you with your property investments, here are the answers to some commonly asked questions that Smith has received at Touchstone Education:

Should I buy now? At a time of relatively weak house-price inflation, you’re unlikely to be disadvantaged by waiting until there’s greater clarity in the market, but the situation is not so perilous that you should hold-off for fear of a collapse. Buying to rent is less of a risk than purchasing for a quick turnaround. You may not achieve the premium you expect in the next few weeks or months if Britain crashes out or if a decision continues to be delayed.

Should I sell now? The supply of homes for sale is at an historic low in many parts of the country so, if you have a property to sell, you could use this to your advantage. In parts of Gloucestershire, Buckinghamshire, Dorset and the East Midlands, for example, there’s a massive shortage of family homes. If you own a desirable property in a sought-after area, you could be sitting on a gold mine.

Is it taking longer to find a buyer because of Brexit? Rightmove reported recently that properties in the North East of England take the longest to sell - 85 days on average from listing to going under offer – while Scotland has the fastest selling times in the UK, at 53 days. Remember these are only averages and, in some hotspots, sales are taking less than a fortnight. There’s no doubt that, with the March 29 deadline for Brexit looming, many people will be waiting until afterwards to decideto buy or sell.

Can I test the market before March 29? Having a property listed for sale over several months can be a turn-off to potential buyers and dropping the price can be even more off-putting. One way to avoid creating a digital footprint is to ask an estate agent to advertise your property “off market”, by advertising it only to buyers on their database.

What can I do if my property doesn’t sell? Look at the asking price and consider how the property is being marketed. If it’s unfurnished, think about adding some decoration or furniture. Sometimes small adjustments to your schedule can make a big difference, such as changing the order of images or getting some better photographs taken.

Can bargains be picked up amid Brexit uncertainty? In some areas, price falls have been caused by non-Brexit related factors such as high stamp duty charges. It is still possible to negotiate a bargain, with the biggest discounts to be had in more expensive areas.Rightmove will tell you what prices you can expect to pay from comparable sales in each area.  PropCast looks at the number of properties for sale in each postcode area and calculates the percentage under offer or sold subject to contract.

Is it worth haggling? If a seller is being pressured to move, you’ll be in a better position to bargain, particularly if you’re not in a chain and you don’t need a mortgage. In many areas, sellers’ expectations are at their lowest for a generation, so buyers are in a particularly strong position. Don’t be tempted to buy a property just because it’s going for a song. There may underlying issues that would make it difficult to sell on, even in a buoyant market.

How can I mitigate against rising interest rates? Interest rates are increasing, and most estate agents expect them to continue rising throughout 2019. As a result, buyers are tightening their belts, with morere-mortgaging to lessen their exposure, moving to mortgage-free or cutting maintenance bills. More people are moving onto fixed-rate deals, but the clever money is against fixing for longer than five years as lots of external factors – including Brexit - could influence and change the market in the medium term.

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Letting agent welcomes tenant fees ban as it ‘rights a flawed piece of legislation’

January 31, 2019

The government’s ban on tenant fees is good for business and will strengthen the relationship between landlords and tenants, according to one letting agent based in Scotland.

DJ Alexander Ltd, one of the largest family-run property management businesses north of the border, believes that charging tenants administration fees is both unnecessary and bad for business.

The company, headed up by brothers David and John Alexander, believes that the experience of the Scottish market means that Scotland could be the model for future letting in the rest of the UK.

The regulations in the forthcoming Tenants Fees Bill in England and Wales have been in place in Scotland since 2012; the no fault grounds for eviction notices no longer exist in Scotland; and the Scottish government recently introduced much greater security of tenure for tenants.

David Alexander, joint managing director of Apropos by DJ Alexander Ltd, said: “In many ways Scotland has led the way in improving the rights of tenants and changing the relationship between landlord and tenant. Too often this relationship has been confrontational and divisive with each side pitted against the other. Rather than resolve any disputes or problems the attitudes and the regulations seem to be established to dispose of any complaint by a tenant rather than address it.”

“The Tenants Fees Bill simply rights a flawed piece of legislation that allowed unwarranted and unfair charges to develop under the camouflage of ‘administration expenses’ often with little or no explanation of what these were for or why they were being applied. With many letting agents operating a business model where such charges account for a quarter to a third of income it is clear that they were not motivated to end these charges, reduce their levels, or to have them examined in too much detail.”

John Alexander believes that the ban on the fees will result in higher fees for landlords, which will concern many buy-to-let investors.

He commented: “When these charges were ended in 2012, and they were never as substantial a part of the Scottish market as they have been in England and Wales, there were doom-mongers who predicted the end of the lettings market. But this did not happen, the market adapted, landlords were charged more, but the best agents and the best landlords adapted and realised that this was fairer for the tenant and, in the long term, created a better relationship between the two.”

“Equally the ending of the no faults ground for eviction notices and introducing much greater security of tenure for tenants was feared by some in the property market as a sign of them losing control. On the contrary it gives agents, landlords and tenants the opportunity to develop a relationship built on trust, on fairness, and on developing a long-term relationship to their mutual benefit.”

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Tenants in for a ‘rocky ride this year’

January 31, 2019

Undoubtedly, 2018 was another tough year for landlords. With so many tax and regulatory changes over the past couple of years, there was a further decline in the number of buy-to-let acquisitions last year.

Based on figures from UK Finance, the number of buy-to-let mortgages secured in 2018 dropped to below 70,000.

Despite a drop in the number of new private rental properties coming onto the market, the number of tenants experiencing rent increases fell for the fourth month running in December, with 18% of letting agents reporting that landlords increased rents, according to ARLA Propertymark.

The trade body says that last month’s figure is the lowest recorded since December 2017, when the number of tenants experiencing rent rises was 16%.

However, the lack of competition from landlords for properties will inevitably reduce the supply of much needed housing in the private rented market at a time when some buy-to-let landlords are actively reducing the size of their property portfolios or exiting the buy-to-let market altogether, and that is expected to place upward pressure on rental values this year.

David Cox, ARLA Propertymark chief executive, commented: “Although December’s figures indicate that tenants finished the year in the driving seat, they’re in for a rocky ride this year.

“With the Tenant Fees Bill passing its final hurdle in Parliament last week, it is now waiting to receive Royal Assent before being passed into law and implemented on 1st June. This means it’s only a matter of time until we could see rent prices starting to creep up again.

“As we’ve said repeatedly, landlords have faced continued regulatory change and increasing costs over the last few years, and the tenant fees ban will only add to this burden meaning many will either have to start increasing rents for tenants or exit the market.”

 Average number of tenants experiencing rent hikes over the year

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Landlord ordered to pay almost £6,500 for poor standards

January 31, 2019

A buy-to-let landlord has been fined close to £6,500 after failing to make improvements to a house in Ilkeston, Derbyshire, including the need to address mould and safety issues.

Having failed to comply with an Improvement Notice, served under the Housing Act 2004, to sort out the damp and mould on the kitchen wall of the property, which was occupied by a family, the council decided to take action against the landlord.

Adrian Dilenardo, 49, from Burley in Wharfedale, Leeds, was prosecuted by Erewash Borough Council in relation to three ‘category two’ hazards that were found at the property during a visit by officers from the council’s housing renewals team.

Southern Derbyshire Magistrates’ Court heard that aside from damp and mould issues inside the property, there was also a risk outside the house due to dangerous rotting timber steps that led to a raised decked garden.

Dilenardo was served with the notice in January 2018 which required him to carry out remedial works to deal with the hazards.

It required the work to be completed by April 6, 2018.

District Judge Jonathan Taaffe issued Dilenardo with a £5,000 fine and ordered him to pay a victim surcharge of £170 and the council’s costs of £1,314.45.

Cllr Gerri Hickton, lead member for Community Engagement at Erewash Borough Council, commented: “We hope this will send a clear message to landlords to keep the houses they own in order.

“Erewash Borough Council works closely with local landlords to maintain standards in homes in the Borough.

“If they fail to comply with the standards required then this outcome should leave no doubt that this can lead to prosecution for a criminal offence.

“People paying rent have the right to live in a safe home and we hope this case will act as a warning to other landlords who have properties in Erewash.”

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Deposit-free renting to be discussed on Radio 4 at 12.15pm today

January 31, 2019

Deposit-free renting will be a subject of discussion on the ‘You and Yours’ consumer affairs programme to be broadcast today on BBC Radio 4 at 12.15pm.

Given the financial pressure on renters under the existing deposit system, with tenants sometimes having to wait weeks to get their deposit returned or having a battle to get charges or financial deductions removed, and not always successfully as deposit disputes don’t always go their way, there is, perhaps unsurprisingly, growing enthusiasm for deposit-free renting.

With a growing number of letting agents signing up to nil-deposit schemes, they are rapidly becoming more commonplace, which is ultimately welcome news for many renters given that research shows that they unequivocally want choices. 

But not everybody is convinced of the merits of the insurance-based alternative to traditional tenant deposits, and so today’s discussion, featuring Flatfair’s founder and CEO, Franz Doerr, should be a lively one.

You can listen to the show by clicking here

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BTL landlords face tough new rules on electrical safety

January 30, 2019

The government has committed to introduce mandatory five yearly electrical safety checks in the private rented sector.

No time date has been outlined for the implementation of the mandatory checks, with the consultation response outlining that Electrical Safety Standards in the private rented sector ‘will be introduced as soon as parliamentary time allows’.

The government’s decision to tighten up rules on electrical safety, which forms parts of its commitment to drive up standards in the PRS, will mean that landlords will be legally required to ensure that the inspectors they hire to carry out safety inspections have the necessary competence and qualifications to do so – with tough financial penalties for those who fail to comply.

New guidance which sets out the minimum level of competence and qualifications necessary for those carrying out these important inspections will be published by the government.

Housing minister Heather Wheeler said: “Everyone has the right to feel safe and secure in their own home. While measures are already in place to crack down on the small minority of landlords who rent out unsafe properties, we need to do more to protect tenants.

“These new measures will reduce the risk of faulty electrical equipment, giving people peace of mind and helping to keep them safe in their homes.

“It will also provide clear guidance to landlords on who they should be hiring to carry out these important electrical safety checks.

“The new guidance will provide clear accountability at each stage of the inspection process – of what is required and whose responsibility it is – but without placing excessive cost and time burdens on landlords.”

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Rent prices increase across England and Wales

January 30, 2019

The average rent across England and Wales has increased by 1.8% in the last 12 months, hitting an average of £865 per calendar month (pcm) in December, according to the latest data from Your Move.

Rents in the South West outstripped all other regions in 2018, increasing by 4.1% to hit an average of £702pcm.

The West Midlands saw the strongest gains month-on-month, up 0.5%, taking the average rent up to £630pcm.  

The rental market in London unsurprisingly remains the most expensive place to rent, with rents remaining stable across December. However, prices here dropped year-on-year, with a price fall of 0.8% leaving the average rent at £1,263pcm.

The South East of England, where rents rose 1.2% year-on-year, to reach £897pcm, is the second most expensive region, followed by the East of England where the average rent is now £881pcm.

Some landlords saw their returns squeezed during 2018, and yet Your Move found that each of the ten regions in the survey recorded the same average yields in December as they did in the previous month.

Across England and Wales the average also remained the same, at 4.3%.

The North West, West Midlands, Wales and the East of England all ended the year with smaller yields than they did a year previously. But the East Midlands bucked this trend with the average returns rising from 4% to 4.2% year-on-year.

 The two most northerly regions continued to offer the best percentage returns for landlords. In the North East the average yield was 5% while in the North West it was 4.8%.

Martyn Alderton, national lettings director at Your Move, commented: “While the rental market tends to wind down as we reach the end of the year, there were still some positive advancements this year, with prices rising in all but two regions.

“While landlords in most areas saw their yields squeezed in 2018, there was good news as returns held firm between November and December.

“Tenant arrears have spiked compared to November, but this often occurs at this time of year.”

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Legal & General acquires its first BTR scheme in Scotland

January 30, 2019

Legal & General has unveiled its first Build to Rent (BTR) scheme in Scotland to help meet the increasing demand for affordable, quality rental accommodation across the UK.

It will provide funds for Drum Property Group to deliver 324 apartments within Glasgow’s new Buchanan Wharf waterside regeneration area, which will also house the new Northern European hub of Barclays Bank.

Consisting of two 18 storey towers, current design iterations include dining space, a gym, a residents’ lounge and a games room.

Buchanan Wharf, which overlooks the River Clyde, will also offer a 4,250 sq ft communal roof terrace and is walking distance from Glasgow Central Station and the International Financial Services District, linked by the Tradeston Bridge.

Legal & General has identified Glasgow as a key target for regeneration. Over the last 10 years, the city has seen particularly low levels of residential development, compared with other major cities.

Just 517 new homes were completed in 2017, falling substantially short of the 2,500 new homes needed per annum, according to Glasgow City Council.

Dan Batterton, Head of Build To Rent at LGIM Real Assets, said: “Glasgow has seen very low levels of residential development over the last decade. This acute supply and demand imbalance has made it an important target for us, demonstrating our commitment to quality asset selection, with sites cherry-picked by assessing needs-based demand to provide long-term, stabilised cashflows for investors.

“With Glasgow predicted to continue to see notable population growth, this latest acquisition is another great example of Legal & General investing in an area with significant urban regeneration potential and providing large scale sustainable rental schemes which will have a positive long term socioeconomic impact, delivering much needed homes.”

Scotland, and Glasgow in particular, has been a key target for Legal & General as part of it Future Cities initiative, according to “Paul Miller, MD principal investing at Legal & General Capital.

He said: “We are excited to be bringing a long term sustainable rental scheme to the area to meet the demands of this vibrant and fast-growing city.”

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Santander launches one-year fixed rate buy-to-let product

January 30, 2019

Santander has launched what is believed to be the first ever one-year fixed rate buy-to-let mortgage.

The short-term deal, which is available at up to 75% loan-to-value (LTV), comes with no product fees and a rate of 2.25%.

Although research shows that an increasing number of landlords are choosing five-year fixed rate deals, which offer greater security in the existing uncertain economic climate, Santander’s one-year product is sure to appeal to some landlords.

David Hollingworth of L&C Mortgages told commented: “The addition of a different product is always a positive thing as it can help plug a gap and meet the individual borrower's needs.”

“However, I'm not convinced that we will see landlords queuing up in big numbers for a short-term deal like this.

“I expect more to be looking to take advantage of the currently low interest rates on offer to shore up their finances over the medium term.”

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New expat range launched by Cambridge Building Society

January 30, 2019

Cambridge Building Society has unveiled a new range of expat mortgage products for landlords looking to acquire or remortgage a buy-to-let property in the UK whilst living overseas.

The new buy-to-let products, which are available to those looking to borrow up to 75% loan-to-value (LTV), includes a five-year fixed rate deal at 3.49% and a two-year fixed rate product at 2.89%.

For the five-year product, applicants will be assessed using a stress rate of 4.99%, with rental coverage of 140%, which drops to 125% on like for like remortgages.

Both two- and five-year products have an applicant fee of £499 and a completion fee of £1,500.

The products can be combined with other criteria from the lender’s BTL range, including a maximum loan amount of £750,000.

Tracy Simpson, head of lending at Cambridge Building Society, said: “This new range of products demonstrates a commitment to this type of borrower and how we continue to invest in our BTL offering.

“Landlords who are based abroad often have a specific set of circumstances and our manual underwriting approach allows these to be taken into consideration.”

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Accord Buy to Let launches five-year fix at 2.22%

January 29, 2019

Accord Buy to Let has launched a five-year fixed rate deal at 2.22% up to 60% loan-to-value (LTV), as part of a number of product changes.

The intermediary-only lender, which is part of Yorkshire Building Society Group, has reduced all five-year fixed rates, as well as its two-year fixed rates at 75% LTV, while its tracker mortgages are being cut by 0.3%.

The 2.22% five-year fixed rate deal is the highlight of the new range, and is offered to landlords with a 60% LTV for those either remortgaging or acquiring a new property, and comes with a £950 product fee.

The lender is also offering a rather attractive two-year fixed rate of 1.58% at 75% LTV, subject to a £1,995 product fee.

In addition, the lender has launched a range of three-year fixed rates for landlords with 40% deposits. It’s offering a three-year fixed rate at 2.45% with no product fee.

Toni Roberts, Accord Buy to Let’s Mortgage Product Manager, commented: “Uncertainty surrounding the wider economy and bank rates has meant Brokers are telling us that landlords are keen to fix their repayments for longer.

“That’s why we’ve introduced three competitive three-year fixed rates and reduced all of our five-year fixed rate products. We hope they will prove popular with brokers and landlords.”

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Are you prepared for the letting fees ban?

January 29, 2019

After the Tenant Fees Bill received Royal Assent last week, landlords and letting agents will, from June 1st 2019, no longer be able to charge fees to set up or renew a tenancy in the private rented sector, but are you prepared for the changes?

The new law will not just mean a ban on letting fees, but also the majority of other upfront fees payable by tenants to rent a property in England.

There will also be a cap on the amount of refundable security deposit a tenant would be required to pay to the value of five weeks’ rent as well as a cap on the amount of holding deposit a tenant will be required to put down to secure a property to the value of one week’s rent.

The government believes that the Bill will make renting properties in England fairer and more affordable for tenants by reducing the costs at the outset of a tenancy, but the fees ban will undoubtedly have a multitude of effects on landlords.

To help prepare for the changes, Andrew Turner, chief executive at specialist buy-to-let mortgage broker Commercial Trust Limited, offers the following advice:

Don’t lose good tenants!

Many tenants may treat the news of the impending Tenant Fees Bill as good news and an opportunity to review their existing living arrangements.

As a landlord, you may not want to lose good tenants, particularly if they are reliable, pay their rent on time and keep your property clean and in good condition.

By opening dialogue with tenants, you may be able to ascertain if they are happy with their present living arrangements or if there is anything they are unhappy about. That gives you the opportunity of remedial action.

Be prepared for legal changes

From June 1st, there are a range of fees that agents and landlords will no longer be able to charge tenants for.

If you charge one of the banned fees to an existing tenant after this date, you will be unable to serve a valid Section 21 notice until you have provided a full refund of this charge.

Furthermore, it would make sense to review your existing contract templates ahead of the Ban and to update these, to ensure they do not include clauses that will no longer be valid, pertaining to outlawed fees.

Speak to your letting agent

Many letting agents may still be disseminating the fall-out from the Tenant Fees Bill, but for most, the main points banning tenant fees, have been known of for some time.

If you use a letting agency for services, it may be prudent to have a conversation with them to establish if their charging structure is going to change, or if they intend to amend the services they supply.

It is worth asking how new technology might change the relationship, as several agencies are looking to deploy software to streamline their services and save costs. But, is that going to suit you as a landlord and will you receive the same level of service you have become accustomed to?

The bottom line for most landlords is going to be whether agents make up any shortfall in revenues, as a result of not being able to charge tenants, by adding costs to landlord services.

It is worth fully investigating whether you are going to face higher costs – and just to clarify, you might also want to speak with a tax specialist to understand which agent costs are tax deductible. This might in the long run save you having to hike rents, particularly if you are keen to keep your existing tenants.

Looking to secure a rental property ahead of a possible June 1st rush?

If you are thinking of investing in buy to let, for the first time, or as a portfolio landlord or you are looking to remortgage, it might be worth starting the process as soon as possible.

It can take time for a buy to let mortgage application to complete its process, no two cases are the same.

The only certainty is that the longer you leave it, the less likely you are to have a property ready to let out, ahead of any possible surge in tenant demand.

As I always say with buy to let investment, it is worth investing the time in planning ahead, to ensure things run smoothly.

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UK buy-to-let landlords claimed £17.7bn in tax relief last year – claim

January 29, 2019

Despite government cuts, a new report claims that buy-to-let landlords in the UK claimed £17.7bn in tax relief last year, up from £17.4bn the previous year.

The study, undertaken by ludlowthompson, suggests that even once all of the government’s planned reductions to buy-to-let tax relief are fully implemented by 2020, landlords will still be able to offset £16.7bn of their expenses against rental income.

Restrictions to tax relief introduced since 2015 include changes to the way wear and tear allowance is calculated and the amount of income tax relief available on interest on mortgages.

Landlords were able to claim £7bn in tax relief on mortgage interest and other financial costs in the last year.

A further £4.1bn was claimed for property repairs and maintenance.

Landlords are still able to claim tax relief when purchasing furniture for a rental property under wear and tear allowance.

Stephen Ludlow, Chairman at ludlowthompson, said: “The tax grab on buy-to-let investment is unwelcome but it has not undermined the attractions of buy-to-let especially when compared to the volatile stock market.”

He added: “You’re still able to offset the vast majority of your costs - ensuring landlords will still benefit from tax relief on a high proportion of their rental income.

“Tax reliefs are one way that can incentivise landlords to continue investing in their rental properties thereby improving the quality of rental stock across the UK. If landlords are not allowed to offset their costs, they may be dis-incentivised from investing in buy-to-let – and that would impact the supply and quality of rental property as a whole.

“Policy-makers need to ensure they still encourage landlords to invest in buy-to-let. They are essential for ensuring a strong supply of high-quality rental property. This helps improve labour mobility, particularly in large economic hubs such as London. The government should look to keep further intervention in the sector to a minimum.”

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Vida Homeloans cuts BTL rates to offer ‘greater flexibility and choice’

January 29, 2019

Vida Homeloans has reduced rates across its buy-to-let range by up to 0.5%, with the lowest two-year fixed rate now starting from 3.14% and five-year deal at 3.59%.

The lender has also added an 85% LTV buy-to-let product for loans up to £250,000, while also improving its expat criteria.

LTVs for buy-to-let applicants resident in a non-EEA country has increased from 65% to 75%, while they can also now borrow via an SPV, as well as  benefit from rate cuts.

The specialist lender’s landlords can now bring up to 20 properties to Vida, up from 15, and their total portfolio can be up to 100 properties.

Louisa Sedgwick, director of sales, mortgages at Vida Homeloans, said: “Not only do they [the new products] offer greater flexibility and choice, but they also provide genuine affordable solutions for customers.

“We have also taken broker feedback onboard and have worked hard to improve our service propositions to enable a smoother journey.”

Aside from revamp its buy-to-let proposition; Vida Homeloans has also updated its residential products.

In fact, Vida says that this is its biggest product update since its launch into the market in October 2016.

“Not only do they [the new products] offer greater flexibility and choice, but they also provide genuine affordable solutions for customers,” said Sedgwick.

“I’m confident that these updates to our residential and buy-to-let propositions will be received positively,” he added.

  

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Rogue letting agents jailed for conning landlords and tenants

January 28, 2019

Three rogue directors of a letting agency in London who conned at least landlords and tenants out of more than £105,000 were sentenced last week at Blackfriars Crown Court to two years and four months each in prison.

Mohammed Rayn Mashuk, 42, Mohammed Ibrahim Ali, 37, and Ahmed Ali Syed, 37, who ran north London-based letting agency Crestons, were convicted last month of carrying on business for a fraudulent purpose, as officers of Sirs Associates Ltd, trading as Crestons, based in Islington and neighbouring boroughs.

The trio were finally jailed last week and banned from acting as company directors for the next eight years. 

Prosecutor Richard Heller said £105,000 was taken from at least 19 victims who hired Crestons through its offices in Camden, Islington and Spitalfields. He said a series of “phoenix” company names were used to keep the con going between 2013 and 2016, so that when one had to be shut down another identical operation would spring up.

The investigation was triggered by complaints from tenants and landlords who had fallen victim to Crestons.

Following the prosecution, Islington's housing chief Cllr Diarmaid Ward said: “This is a major victory for the council, on behalf of private tenants and landlords not just in Islington and London but across the country – sending the message loud and clear that rogue letting agencies cannot rip off their clients and get away with it.

“Prosecutions like this are rare but vital in the fight for better standards in the private housing market. We won’t stop here.”

The council’s trading standards team is now pursuing confiscation orders to claw back much money from the agents.

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The Civil Justice Council doesn’t support plans for a housing court

January 28, 2019

The Civil Justice Council has said it cannot support government plans for a specialist housing court, deeming it unnecessary. 

Responding to the Ministry of Housing, Communities and Local Government’s consultation, which sought views and opinions from a variety of organisations and individuals including the judiciary, landlords and tenants, to help the government to better understand and improve the experience of people using courts and tribunal services in property cases, the influential body said that it cannot support the case for a specialist Housing Court.

Launching the call for evidence last year, communities secretary James Brokenshire said the proposals would help tenants and landlords access justice when they need it and create a fair housing market.

But The Civil Justice Council, which is led by Sir Terence Etherton, said the money would be better spent elsewhere rather than on a court designed to provide a single path of redress for landlords and tenants.

The Civil Justice Council argues that existing delays generally exist are due to a lack of resources in the court system and a lack of bailiffs, rather than any lack of knowledge among judges or the courts they sit in.

It added that delays also occur in part due to errors by landlords and agents and a lack of knowledge of the technical requirements when granting assured shorthold tenancies, and that newly-created housing court would not change that.

The Civil Justice Council’s response stated: ‘The Civil Justice Council would not support a major redesign of and/or transfer of cases within the courts and tribunal services for housing cases at this time,’ said the response.

‘This is particularly so at a time when the court reform programme and the increasing digitalisation of procedures within the courts and tribunal service is yet to be completed or evaluated.’

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More people are selling up and renting in retirement

January 28, 2019

An increasing number of over 60s are looking to sell up and rent in retirement, research shows.

According to the Centre for Ageing Better (CfAB), the number of over-60s renting privately has risen from 254,000 in 2007 to 414,000 in 2017. And it predicts about a third of people over 60 could be living in private rented accommodation by 2040.

The CfAB recently reported that not only had 200,000 older adults joined the rental market in the past four years, but “a growing number of older homeowners are choosing to sell up and rent in retirement”.

It suggests that many of them are downsizing from large family properties to a home that is more manageable.

Many are parents or grandparents who want to free up assets to help their family on to the housing ladder via the Bank of Mum and Dad. Others want to move closer to their family. For some, the motivation will be moving to a more desirable area.

Gillian Girling, chief executive, Girlings Retirement Rentals, said: “Most retirement developments are in convenient places, with good transport links and shops and doctors’ surgeries close by.

“Renting also gives people financial freedom. They can budget a fixed amount of rent per month and, as there are no additional maintenance and service charges to pay, there are no surprise bills.”

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