Property News

Property should be held as part of a ‘well-diversified portfolio of investments’

May 22, 2018

A number of people have unsurprisingly invested in property over the years as a means of supplementing their income, supported by solid demand from tenants and stable yields, as buy-to-let consolidated itself as the investment of choice. 

However, a new survey shows a concerning swing in investor attitudes towards investing in property, with a growing number of investors shying away from the sector.

Rathbone Investment Management polled more than 1,000 investors and 500 high-net-worth (HNW) individuals and found that 38% of investors in this country no longer view property as a good investment.

The research also revealed that while a quarter of HNW investors own buy-to-let properties, just 7% plan to add to their portfolios.

Robert Szechenyi, investment director at Rathbones, commented: “Not only are the returns now being impacted by an increased rate of tax, but they can also prove high-risk investments due to a lack of diversification.

“Property investments require a large amount of capital to be held in one single asset, and landlords will often hold a number of properties within one region.

“Investors who are looking to invest in property, should make sure to assess their risk appetite, look at all alternative options and make sure this property is held within a well-diversified portfolio of investments.”

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Claim of ‘mass exodus’ of BTL landlords has been overstated

May 22, 2018

The private rented sector will not experience a “mass exodus” of private landlords as a result of tax changes and tougher mortgage rules, a senior figure at Foundation Home Loans has insisted.

A recent study, undertaken by the National Landlords Association (NLA), suggests that almost a fifth of landlords - 19% - plan to exit the PRS this year amid tax changes, including the phasing out of mortgage interest relief.

The survey of more than 1,000 private landlords suggests that a perfect storm of increasing demand from renters and landlords selling up will have a major impact on the market, which will inevitably place upward pressure on rental values.

But Jeff Knight, director of marketing at Foundation Home Loans, believes that claims that there will be a mass departure of landlords is misleading and simply a “dramatic view for market”.

He commented: “A mass exodus may be an exaggerated view of the market. While the potential for thousands of homes becoming available for first-time-buyers is what the market needs, we have to consider the fact that firstly, not everyone is in a position to buy and secondly, it’s important that good landlords don’t make a knee-jerk reaction to exit in the face of the wave of tax and regulatory changes.

“Yes, the cut to stamp duty was a huge leg-up for first-time buyers, but we need to ensure there is quality property available for those who have not quite been able to get over the line or do not find the idea of buy-to-let appealing.

“Buy to Let has certainly become more complex over the years, but seeking the help of a financial adviser will help landlords to navigate the hurdles, professionalise their approach and ultimately play their role in the stepping stone to ownership.” 

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Accidental landlords are confused over rental responsibilities

May 22, 2018

When it comes to rental responsibilities during a tenancy, there remains some confusion among so-called ‘accidental landlords’ when it comes to understanding the latest safety obligations for renting out property.

Legally, landlords must ensure that gas appliances are checked annually by a Gas Safe registered engineer and must provide their tenants with a Gas Safety Certificate within 28 days of the annual check taking place.

By law, landlords are also required to install a working smoke alarm, while regulations require carbon monoxide alarms in rooms with a solid fuel appliance.

However, a new survey by Gas Tag has found that many tenants and amateur landlords are confused over rental responsibilities and legal obligations.

The study found that 28% of respondents either did not have or did not know if their rented home had a Gas Safety Certificate, while almost a quarter - 24% - did not think their landlord was obliged to install a carbon monoxide alarm if there was a solid fuel burning source like wood or coal.

The research also reveals that four in five - 81% - did not know that a landlord is responsible for checking all electrical appliances every time a new tenant moves into a property, while 36% incorrectly assumed that they, rather than their landlord, should be responsible for electrical safety.

Exactly half of those surveyed thought a gas engineer should be Corgi registered, despite the fact that this scheme changed to Gas Safe Register almost a decade ago.

Somewhat worryingly, 29% of respondents were not aware that they should call the National Grid helpline if they smell gas.

Paul Durose, chief executive of Gas Tag, said: “Our findings reveal that there is a huge amount of confusion about what someone’s landlord is responsible for.

“This lack of basic safety knowledge means that thousands of people renting in the UK could be putting their lives at risk.”

He added: “The number of accidental landlords has soared in the UK in the last few years and we’re extremely concerned that many don’t even know their legal obligations to their tenants.”

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Ideal Flatmate secures £1.25m seed fund

May 22, 2018

Ideal Flatmate has closed its second round of funding, taking total investment in the company to £1.25m.

The website, a compatibility-based flatmate matchmaker, enables private landlords to list rooms for rent in London free of charge.

The platform, designed by Cambridge professors, is based on an algorithm similar to that of dating websites and prioritises tenant compatibility in an effort to encourage long-term rental relationships and tenancies.

The algorithm technology, which is functional after the user completes a 20 question survey, focuses primarily on the living habits and sociability of users.

Questions asked were found to be the most important when assessing living suitability in a study by Cambridge Psychologists Dr Paula Banca and Professor Mark P Haggard.

In the space of 12 months, the valuation of the London-based company, which was founded by Tom Gatzen and Rob Imonikhe, has seen its valuation increase by 200%.

Gatzen commented: “This funding is a huge vote of confidence in the business and we are excited to continue building a credible alternative to help Generation Rent find their perfect flatmates.

“The last 12 months have been an incredible journey and our team have performed remarkably in shaping the product, staying close to our users and making constant improvements to the platform.

“We can’t wait to increase the speed of our growth and provide London and the UK with the flat sharing platform it deserves!”

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Will the Chelsea Flower Show inspire you to add value to your property?

May 22, 2018

For the next five days, the grounds of the Royal Hospital in SW3 will be home to the world’s most prestigious flower show, the Royal Horticultural Society’s Chelsea Flower Show.

The site has been transformed into a stunning display of floral art and landscape architecture, with world-famous designers florists and plant experts coming together to showcase the very best in cutting-edge garden design that could, among other things, help you add value to your rental portfolio (well, certainly those properties that have outside space, particularly a garden).

It has previously been reported that a well-maintained garden can add up to 20% to the value of a residential property, not to mention help boost the rental value of the property.

The average residential property in the UK currently stands at £213,000, according to Nationwide. Therefore, by taking care of your outdoor spaces, you could potentially increase the value of your rental property by an average of £43,350, although there are obviously large variations in regional house prices.

If you have left the garden in your rental property to its own devices for a while, giving it a makeover might seem like a huge job.

However, it is certainly worth doing if you’re looking to sell or re-let your property - especially if you want to get the best price possible.

But if you are not a keen gardener, it is not always easy to know where to start. So, here are a few tips for improving the look of your garden, and increasing the price of your property in the process.

Start with some basic maintenance

Before you think about making any big changes, you need to focus on ensuring what you already have is in good condition. You should remove any weeds, prune any trees or shrubs that have become overgrown, and get rid of any plants that are looking particularly worse for wear. You should remove any clutter that you no longer need, as well as use a rake to collect any loose leaves and debris.

Once you’ve done this, the garden will have a new lease of life and it will be easier to identify any areas that require more attention.

Don’t ignore the details

Prospective homebuyers or renters will take note of everything down to the finest details - buying or renting a new property is a huge commitment, after all. So, it’s important that you leave no stone unturned when revamping your garden.

Keep an eye out for fences that could do with a lick of paint, paving stones that would benefit from a good clean, and any garden ornaments that look particularly weathered. If you update these elements, or simply remove them, you’ll be able to improve the look of the garden significantly.

Create as much space as possible

If the property has a spacious garden, it will be far more likely to impress potential buyers or renters. Of course, you can’t increase the actual size of your garden — not without gaining planning permission, anyway. However, it is possible to create the illusion of having more space.

Tall, thin plants, for instance, will allow more light to reach the garden, while it may be worth softening boundaries with climbing plants.

You should also remove and store any large items, such as lawn mowers and barbecues that might be taking up space unnecessarily.

Add personality with flowers

And, finally, you should add some colour and personality to the garden using flowers. You can do this by dotting them around your outdoor spaces in pots, or by creating flowerbeds to plant them in.

Remember that you will be responsible for looking after the garden until you’ve sold or let the your property, so unless you’ve developed a love for gardening during this process, you won’t want to create more work for yourself.

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Significant increase in number of fee-free BTL mortgages

May 21, 2018

Previously, nearly all buy-to-let mortgages charged a minimum 1% arrangement fee, but fresh data from specialist buy-to-let broker Mortgages for Business shows that one in five buy-to-let mortgages now carries no lender arrangement fee, compared to just one in ten – 11% - a year ago.

While the move by lenders to scrap mortgage fees would save landlords money in terms of upfront costs, it is worth pointing out that rates on fee-free deals are occasionally higher than on deals which charge a fee.

Separate data from Moneyfacts shows that buy-to-let investors now have plenty of choice when looking for a mortgage, with 2,022 buy-to-let products currently on the market, up 29.8% year-on-year.

The Prudential Regulation Authority (PRA) rules launched at the end of September 2017, which saw lenders having to apply stricter standards to those with four or more properties, could explain the boost to product numbers, according to Charlotte Nelson, finance expert at moneyfacts.co.uk.

She said: “The BTL market has seen quite a rollercoaster ride over the past year, including multiple changes that have required both landlords and providers to rethink their options.

“However, this hasn’t appeared to deter providers, marking an increase of 464 deals in just one year, which has seen the BTL market break yet another record and rise past the 2,000 mark for the first time on moneyfacts.co.uk’s records.”

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Number of interest-only mortgages falls by almost half

May 21, 2018

The number of interest-only mortgages provided by lenders continues to fall, with the latest data from UK Finance revealing that there are currently 1.7 million outstanding interest-only mortgages, including partial interest-only, down 46% since 2012.

The total value of the interest-only mortgage book is £250bn, down 37% on the corresponding period.

It would appear that borrowers, including many buy-to-let landlords, are paying off their loans by downsizing to smaller properties, or using their savings or other funding sources to settle the debt.

Others are remortgaging, but on to repayment vehicles, because lenders are far more reluctant to handle interest-only loans, reflected by the fact that there was a 14.9% drop in the number of pure interest-only homeowner mortgages outstanding at the end of 2017.

Jackie Bennett, director of mortgages at UK Finance, said: “The number of outstanding interest-only loans has halved in the past six years, with a particularly steep decline in higher loan-to-value mortgages.

“Many borrowers continue to redeem ahead of schedule or switch to a repayment mortgage.

“However, there remains plenty more work to do over the coming years to ensure that those remaining borrowers who have so far been reluctant to engage have viable repayment plans in place.”

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Claim your free tickets for The Southern Homebuilding & Renovating Show

May 21, 2018

The Southern Homebuilding & Renovating Show kicks off at Sandown Park in Surrey at the end of next month, and you can now claim a free pair of free tickets for the show worth £24.

Across three days (30 June-1 July 2018) visitors can speak to more than 220 exhibitors and access free advice sessions, seminars and masterclasses on essential topics which can tackle any problem, from implementing the latest intelligent security systems to funding a remodelling project.

The event is a best-in-class marketplace for all the latest products and services provided by specialist companies in industries ranging from kitchens; bathrooms; doors and windows; heating; energy efficiency; architecture; design; financial services; planning permission and much more.

Aside from providing advice and guidance, real case studies will be at the show to discuss the dilemmas they faced during their self-build/renovation experience, helping visitors with similar problems.

On site, visitors will be able to book bespoke consultations with some of UK’s most prolific property experts including Michael Holmes (director of content and product development for Homebuilding & Renovating magazine); Jason Orme (editorial director of Homebuilding & Renovating magazine); Allan Corfield (self-build expert of Homebuilding & Renovating magazine); Tom McSherry (finance expert of BuildStore) and Sally Tagg (planning permission specialist).

Standard show tickets are £8 in advance or £12 on the door (children under 16 go free).

To claim your free tickets, click here.

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Hampshire Trust Bank change BTL and HMO interest cover ratio

May 21, 2018

Hampshire Trust Bank (HTB) has enhanced the lending criteria on its buy-to-let and home in multiple occupation (HMO) five-year fixed rate deals, enabling customers to potentially borrow more.

HTB will now assess eligible buy-to-let mortgage applications using a minimum of 125% rental cover for companies and 140% for individuals.

The lender has also reduced the minimum ICR thresholds for HMOs with over six bedrooms to 140% for companies and 155% for individuals.

“This is the latest enhancement we have made to our BTL and HMO product and we believe this will help our broker partners to better support their portfolio landlord customers,” said Anna Lewis, head of sales of specialist mortgages at Hampshire Trust Bank.

“We have more enhancements in the pipeline,” she added.

HTB provides a range of specialist mortgage solutions including bridging, development exit finance, buy-to-let and HMO, with loan amounts of up to £5m, and commercial and semi-commercial mortgages, with loan amounts of up to £2.5m.

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UK rental market activity slows in April

May 18, 2018

There was a decline in the number of properties let last month, as a fall in supply restricted choice for prospective renters, fresh data from the Agency Express Property Activity Index shows.

The percentage of properties ‘let’ dropped to sit at -9.1%, owed in part to a 9.4% fall in the volume of homes ‘to let’, according to April’s figures.

The data appears consistent with the latest UK Finance reports which show that there has been a significant fall in the number of buy-to-let landlords looking to add to their property portfolios, with some looking to exit the market altogether due to recent tax changes and tougher mortgage rules.

Looking at performance across the UK, only two of the 12 regions recorded by the Property Activity Index reported a rise in new listings ‘to let’ as well as homes ‘let by’. 

Here are the regions that recorded the smallest declines in this month’s index:

Properties ‘To Let’

  • Central England -1.7%
  • Yorkshire & Humberside -4.6%
  • West Midlands -5.9%
  • Wales -8.30%
  • North West -8.9%

Properties ‘Let By’

  • Yorkshire & Humberside -1%
  • Central England - 2.8%
  • Scotland -4.6%
  • East Midlands -6.4%
  • North East -6.4%

The largest decline in this month’s index was recorded in Wales, where properties ‘let’ fell to -25%.

Stephen Watson, managing director of Agency Express, commented: “We traditionally see a slowdown in activity throughout April and this month is no different. However, if we look back on the Property Activity Index’s historical records we can see that the declines made this year are less that twelve months previous.

“As we now move in to what is usually a robust period for the market we would hope to see a fairy robust spike in activity.”

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Hackitt report welcomed as a “step in the right direction”

May 18, 2018

The publication yesterday of Dame Judith Hackitt’s Independent Review of Building Regulations and Fire Safety, confirming that landlords and building managers will be held accountable by a new ‘joint competent authority’ (JCA) that will oversee safety within multi-occupancy higher-risk residential buildings, has been welcomed as a “step in the right direction” by the Chartered Institute of Environmental Health (CIEH).

The review, which was undertaken in response to the tragic fire at Grenfell Tower last year, examined building and fire safety regulations and related compliance and enforcement, with a focus on high rise residential buildings.

The final report sets out over 50 recommendations for government as to how to deliver a more robust regulatory system for the future, and that includes the introduction of the JCA, which would comprise the combined expertise and knowledge of Local Authority Building Standards and fire and rescue authorities (FRAs) and Health and Safety Executive (HSE).

The bodies would not be merged but those organisations would provide them with a framework to work from to better assess building safety and create “a more unified and consistent intervention process”.

Tamara Sandoul, housing policy manager at CIEH, commented: “We strongly welcome the final report and look to the government to take action quickly in order to make high rise buildings safe places to live in and to reassure occupants that they are well protected from danger.

“First and foremost, all homes should be safe and healthy places to live and everyone needs to have confidence in the way in which their building is being managed.

“We are delighted that the final report acknowledges the need to tackle fire safety in other types of multi-occupied buildings – such as large houses badly converted into flats. We shouldn’t ignore issues with fire safety, whether the building is above or below 18 metres. We would like the Government to further clarify responsibility and enforcement of fire safety within these types of buildings.

“Considering the breadth of this report, we now call on the government to set up the JCA as a priority so it can look in detail at vital issues such as cladding, sprinklers, and fire escapes.”

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Seven-day second charge loan enables landlord to grow BTL portfolio

May 18, 2018

Expert packager Crystal Specialist Finance and Together have teamed up to successfully deliver fast finance enabling their client, a property investment firm, which owns almost 250 properties, to expand its portfolio.

The much needed funding, secured against 26 rental homes owned by the investment firm, collectively worth £3.5m, was delivered in just seven days, tailored to the investor's borrowing needs.

The three investors, two who are self-employed directors of the property business, wanted to keep their favourable interest rate on the current first charge buy-to-let mortgages on the portfolio of properties across the North of England, which they bought before the financial crisis of 2008.

However, the investors wanted to unlock the equity they had built up over the past decade through a second charge loan, and wanted the deal to complete quickly so they could press ahead with adding to their property portfolio, which is why they approached Crystal Specialist Finance.

Marc Goldberg, commercial CEO at Together, said: “Our dedicated team of buy-to-let underwriters was presented with the complete package after Crystal’s clients couldn’t find the finance they needed through mainstream lenders.

“These customers run a multi-million pound property empire, which includes buy-to-let homes, commercial property and car parks, through multiple companies.

“All three of the applicants have spotless credit histories and, between them, have years of financial knowledge, as well as the experience they needed to expand their already-successful business.”

Together liaised closely with trusted experts from legal firm Priority Law and the customers’ solicitors, and provided £879,000 through a second charge loan, agreeing repayments on an interest-only basis.

Jo Breeden, managing director of Crystal Specialist Finance, said: “This case shows that professional and experienced landlords and investors are focusing on growing their portfolios, despite the tax and regulatory challenges of recent years. This limited company didn’t want to lose the interest rates on their first charge mortgages by remortgaging their properties, so, in this case, a second charge was a great option.

“It was fantastic that Together pulled out all the stops to deliver in seven days, allowing the customers to move quickly with their plans to purchase more buy-to-let properties.”

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Sharp decline in buy-to-let lending as tax and tougher mortgage rules bite

May 17, 2018

Buy-to-let mortgage lending plummeted during March, as reflected by the latest data released by UK Finance.

Fresh figures from the banking industry group show that the value of mortgages taken out by landlords in March dived by almost 20% compared with the corresponding month of last year.

A total of 5,500 buy-to-let loans were secured by landlords in the month, down from 6,800 in March last year.

A total of 16,300 properties were acquired with a buy-to-let mortgage during the first three moth of this year, down 11% on the 18,400 homes purchased in the first quarter of 2017.

Hansen Lu at Capital Economics believes that it is unlikely that buy-to-let will “recover anytime soon” as tax changes look set to “erode landlords’ returns”.

Despite the fall in new buy-to-let lending, there was an increase in buy-to-let remortgages, which saw a 0.8% rise with 12,600 completions.

Jackie Bennett, director of mortgages at UK Finance, said: “Remortgaging levels softened in March, after a busier than usual start to the year saw customers locking into attractive deals ahead of a potential interest rate rise.

“There has been relatively flat growth in lending to first-time buyers, reflecting recent Bank of England figures showing a fall in mortgage approvals.

 “Meanwhile the buy-to-let market remains subdued, as recent tax and regulatory changes continue to have an impact on demand.”

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Welsh government to clampdown on ‘sex for rent’ landlords

May 17, 2018

Buy-to-let landlords in Wales who offer free accommodation in return for sex could lose their operating licences, according to plans being drawn up by the Welsh government.

Renting rooms for sexual favours is seen as a growing menace by the Welsh government, and a byproduct of a housing crisis where young people are unable to find somewhere to live without spending excessive sums.

The government wants to tackle the growing problem by amending the Code of Practice for Rent Smart Wales.

Dawn Bowden, assembly member for Merthyr Tydfil and Rhymney, recently met with the minister for housing and regeneration in Wales, Rebecca Evans, to express her concerns, with the latter pledging to end “these horrendous practices”.

In a letter to Bowden, Evans states that she has already instructed officials to amend the code of practice for landlords and agents licensed under Rent Smart Wales to make it clear “that anyone who advertises property for rent with a requirement of sex risks losing their license to operate in Wales”.

The letter from Evans also states that she has “asked officials to work with advertisers, and others, to find ways to stop these advertisements. I would also like to see an awareness and information campaign to highlight the dangers of replying to such advertisements”.

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Unscrupulous landlord fined for unsafe property

May 17, 2018

A rogue landlord has been ordered to pay almost £3,000 after being found guilty of a number of breaches relating to an unlicensed HMO he owns in Bury.

Abdul Raza Saddiqui, aged 50, of Parkhill Road, Bury, was fined £1,200 with £2,452 costs and a £30 victim of crime surcharge after being found guilty of 12 housing offences.

The rental property on Seymour Road in Crumpsall, M8, failed various minimum safety standards, including fire safety and gas safety, putting the tenants at risk.

Other breaches of management regulations discovered by council officers included no working fire alarm, damaged fire doors, cluttered escape routes, broken heating facilities, damaged kitchen units, and filthy and verminous common areas.

At a hearing at Manchester Magistrates’ Court, Saddiqui pleaded guilty to 11 offences of breach of HMO regulations, and one offence of a breach of a condition of his HMO licence.

Cllr Bernard Priest, deputy leader of Manchester City Council, said: “There’s no place for rogue landlords in Manchester. Landlords have a responsibility to provide their tenants good quality, safe housing and we take the issue of tenant safety extremely seriously.

“We will continue to pursue enforcement action to defend the rights of tenants and will not hesitate to take legal action against anyone whose property fails to meet the required standards. Our message to landlords is simple – bring your property up to standard, make sure your tenants are safe and get a licence where the law requires one.”

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Greater demand for The Property Ombudsman services

May 17, 2018

The Property Ombudsman (TPO) scheme has released its latest annual report revealing an increase in the number of consumers contacting the scheme for help.

The TPOs 2017 annual report shows that the number of complaints received rose by 3% to 3,658 last year, with just over £1.3m worth of compensation paid by sales and letting agents.

The average lettings compensation award was £625.

Interestingly, almost half - 49% - of complaints were made by landlords, while 45% were made by tenants.

For the second year running, Greater London saw the highest volume of complaints at 23%, followed by the South East (20%) and North West (11%).

The main cause of complaint related to property management, followed in order by communication and record keeping, tenancy agreements, inventories and deposits, as well as in-house complaints procedure.

Katrine Sporle (pictured), Property Ombudsman, said: “Our primary focus has always been on providing expert advice and quality outcomes. Our early advice plays a key role in empowering consumers by equipping them with information so they can try and resolve the issue directly with their agent.

“Our Early Resolution approach seeks to resolve straightforward disputes quickly and our Adjudication Service is wholly focused on fair and reasonable outcomes.  TPO takes a continuous improvement approach to the services we provide, enabling us to meet the needs of consumers more efficiently, and to raise standards in the industry through information, education and advice on systemic issues arising in what is a dynamic industry.

“With 38,272 offices and departments now following our Codes of Practice, approved by Chartered Trading Standards Institute (CTSI), I think it is encouraging that complaints have risen by just 3% and that 10% fewer agents had to be referred to our Disciplinary and Standards Committee.

“We agree with Government that there are gaps in the current provisions of consumer redress within the property sector which need addressing and, together with industry and consumer partners, we are keen to play our part in regulation and redress reform.

“Overall, 2017 represented a positive year of innovation and improvement, which will reassure consumers and the industry that there is an alternative to costly and lengthy court proceedings that can be relied on to provide timely, fair and reasonable remedies.”

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New combined bridge and buy-to-let mortgage launched

May 17, 2018

A new bridging and buy-to-let combination mortgage deal with a joint application and underwriting process has been launched by UX Mortgages and bridging loan provider Tiuta.

The new ‘Dual’ product, designed for property investors who require funds for a swift acquisition, is believed to be the first to combine bridging and buy-to-let, with the bridging loan to be transferred into a remortgage as a longer term option.

Bridging finance, known for its speed, offers much faster time to completion than high-street lenders, which is mainly why this form of short-term finance is growing more popular.

The speed at which bridging finance can be implemented is the main reason for its use, as a bridging lender provides a real time solution to any potential funding gap by making available the required funding a purchaser needs to acquire property in as little as 24 hours. 

Randeesh Sandhu, managing director of UX, commented: “Dual offers investors the peace of mind of a guaranteed mortgage and could potentially save purchasers thousands of pounds in interest compared with the traditional bridging model.”

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Rental supply set to fall as landlords look to quit sector

May 16, 2018

The number of landlords planning to sell some or all of their buy-to-let properties remains at an historic high, according to new research.

A fifth of landlords - 19% - said they would offload properties this year due primarily to the mortgage interest relief changes.

The survey of more than 1,000 private landlords suggests that a perfect storm of increasing demand from renters and landlords selling up will have a major impact on the market, which will inevitably place upward pressure on rental values.

The figures, from the National Landlords Association (NLA), show that up to 380,000 landlords are looking to sell property in the near future.

The data indicates that almost half - 45% - of landlords who intend to sell property in the coming year plan to sell individual flats and apartments, with a third - 33% - looking to sell terraced homes, which is bad news for renters, but potentially good news for first-time buyers.

Richard Lambert, CEO of the National Landlords Association (NLA), said: “These findings sound like positive news for potential new homeowners, but the reality is not everyone wants, or is in a position financially, to buy.

“In fact, if all these homes are sold as planned then it will lead to a significant fall in the supply of property available to those who choose to rent, or have no other option but to rent.”

The NLA has produced a video and discussion paper – the hustle for homes – about the relationship between landlords and first time buyers in the market. 

Lambert added: “Everyone seems to have a gut instinct about the extent to which they feel landlords and first time buyers compete for homes in the UK, but homeownership is a highly emotive issue so the facts are often overlooked.

“There’s certainly no denying that competition exists, but the significant barriers to homeownership are more likely to be the high cost of a deposit or ability to access mortgage finance.

“With our new video and discussion paper we hope to provide more of an accurate picture of these issues, and importantly we want to focus the debate on what can be done to ensure that everyone has a roof over their head - regardless of whether they rent or own.”

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Yorkshire and Humber region identified as a BTL hotspot

May 16, 2018

The majority of buy-to-let landlords with properties in Yorkshire and Humberside are feeling positive about the future of the rental market, with many thinking about buying more properties to rent in the future, according to a survey by Knight Knox.

The survey of 500 landlords in the UK found that landlords with property in the Yorkshire and Humberside region are set to purchase more buy-to-let properties in the next five years than any other region.

The survey highlighted that 60% of landlords in Yorkshire and Humberside intend to buy another buy-to-let property in the next five years, compared to the national average of 40%.

Andy Phillips, commercial director at Knight Knox, said: “The results of our survey demonstrate that Yorkshire is fast becoming a hot spot for investment in the private rented sector, while the capital is in decline.

“The major cities in Yorkshire, such as Leeds and Sheffield, are growing rapidly, and with that come increased demand for rental properties in these areas – and savvy investors are capitalising on this in droves.”

Knight Knox’s statistics also reveal that almost half of Yorkshire landlords rely on renting out properties as their primary income, earning an average of £26,474 per annum.

Phillips added: “The results show that landlords in Yorkshire evidently see their future lying with buy-to-let properties and the negative Brexit commentary clearly doesn’t seem to have deterred them.”

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Legal and General Mortgage Club adds Landbay to its lender panel

May 16, 2018

Legal and General Mortgage Club has added Landbay to its lender panel, offering members immediate access to a wide range of specialist buy-to-let products.

Products for portfolio landlords, HMOs, MUFBs, first-time landlords, limited companies and new build properties, are among the latest range offered by Landbay.

The partnership will also give Legal and General Mortgage Club members access to Landbay’s online intermediary portal, which includes features such as case tracking and a property portfolio key.

Once brokers have completed the online application process, Landbay issues an Offer in Principle within 48 hours and regularly completes loans within 21 days.

Paul Brett, managing director intermediaries at Landbay, said: “A raft of regulatory changes in recent years has meant that more and more buy-to-let cases now have specialist requirements, and therefore usually require a specialist lender to underwrite them.

“Working with Legal & General Mortgage Club will allow us to open up our expertise to a strong network of brokers across England and Wales, filling a gap for those who feel they aren’t getting the necessary support from some of the mainstream lenders at this confusing time.”

Danny Belton, head of lender relationships at Legal & General Mortgage Club, said that he is delighted that Landbay has joined ranks.

He commented: “Landbay will make an excellent addition to our panel of lenders. Our brokers will benefit greatly from a tailored and specialist offering to assist their landlord clients in today’s challenging buy-to-let market.” 

 

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Landlords urged to take action to offset higher letting agent fees

May 15, 2018

Buy-to-let landlords are being advised to think seriously about how they can recoup costs to help pay for higher letting agents fees.

Several reports suggest that many letting agents are likely to review their charges once fees to tenants are banned next year, with a lot of upward pressure on landlord charges after the ban widely anticipated.

The government's impact assessment of the fees ban estimates that the collective cost to landlords in the policy’s first year of operation will be £82.9m, while it also estimates that the caps on security and holding deposits, which will also be introduced next year, could cost landlords a further £1.3m.

It is widely anticipated that the additional cost to landlords will come in the form of higher management fees from letting agents looking to replace lost income.

The impact assessment estimates that the cost to letting agents in the first year of the ban will be upwards of £157m, which is why PropTech startup RentalStep is advising landlords to consider their monthly outgoings and start shopping around for products that could save them money.

“It’s time for landlords to evaluate their options to ensure the new law doesn't have a negative impact on their property business,” said Mike Georgeson, founder and chief executive of RentalStep.

He continued: “It’s clear from the government’s figures that the post-fees ban landscape is likely to be an expensive one for landlords at a time when the cost of letting a property has never been higher.

“That's why landlords need to shop around and explore alternative options to make sure they are getting value for money when it comes to necessary services such as tenant referencing and property advertising.”

Technology and innovation also have an important part to play in keeping landlords’ costs down, according to the PropTech entrepreneur.

“Products that utilise technology effectively can provide more efficient and time-saving processes at a lower cost than many traditional options,” he added.

“The rental market is changing at a rapid pace and if landlords want to remain successful, they need to find solutions that can help them to keep their properties occupied for a lower cost.”

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NFB and RLA join forces to improve rental standards

May 15, 2018

Buy-to-let landlords will hopefully have better access to reputable builders when developing and maintaining homes across England and Wales, following a new collaboration between the National Federation of Builders (NFB) and the Residential Landlords Association (RLA).

The new partnership has been formed to help make it easier for landlords to secure builders with the appropriate qualifications, accreditations and experience to complete projects to the required standards and regulations, such as the new Minimum Energy Efficiency Standards (MEES), using the NFB’s Building Works Hub.

Andrew Goodacre, chief executive of the RLA, commented: “Choosing the right builder for the right job can be a real headache for landlords.

“Through this new partnership we can ease some of that strain by putting our members in contact with builders local to them who have a proven track record delivering high quality work and have been independently vetted by the NFB.”

Having access to builders that are approved by the NFB enables landlords to make the necessary changes and avoid increased costs so often associated with poor workmanship when trade association endorsement does not exist.

Only builders who meet strict criteria will be approved and recommended via the NFB building works hub.

Richard Beresford, chief executive of the NFB, said: “NFB members are professional builders and contractors, dedicated to providing quality services with care and consideration.

“We’re very proud of the high standards that our members achieve and are pleased to offer members of the Residential Landlords Association a top notch service and the confidence that this partnership inspires.”

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Don’t fall victim to your lenders’ SVR

May 15, 2018

Buy-to-let landlords are being reminded to do all they can to avoid the trap awaiting borrowers when fixed-rate mortgage deals end.

A third - 33% - of mortgage holders ended up on their lender’s Standard Variable Rate (SVR) last year, costing them on average £371, a new study by Countrywide and online mortgage adviser Dynamo, shows.

Remortgagers who left their mortgage renewal too late spent an average of 42 days on their lender’s SVR at an additional cost of £61.83 per week on average, according to the research, which calculated the cost of not remortgaging before the existing mortgage product expires by tracking the proportion of people who ended up on their lender’s SVR in 2017 and how many days they remained on that rate.

Seb McDermott, CEO at Dynamo, recommends that mortgage holders start their search for a remortgage around four months before their existing deal is due to expire.

He said: “The research shows that far too many people are not switching mortgage deals in time. 

“Last year, one in three mortgage holders ended up on their lender’s SVR rate for an average of 42 days after their existing deal expired.  This can prove costly - to the tune of nearly £62 a week for the six week period - which is more than the average family food shop.”

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Landlord guilty of treating vulnerable tenants as ‘slaves’

May 15, 2018

A buy-to-let landlord has been found guilty of exploiting six vulnerable tenants by bullying them into working for him without pay.

Hargit Bariana shamelessly set his tenants to work without pay at his chip shop and pizza takeaways in Blyth and Sunderland and threatened to beat them if they did not comply.

Instead of receiving money, the tenants were given leftover food and alcohol.

The 46-year-old landlord denied the modern slavery charges, as well as robbery and supplying diazepam.

But a jury at Newcastle Crown Court found Bariana, of Netherton Colliery, guilty of six offences of requiring another person to perform forced or compulsory labour.

The charges related to a period between 2010 and 2016, during which Bariana said he had shown the men compassion.

The court was told that Bariana used “tenants in his multi-occupancy house as unpaid labour and kept them in line with beatings and by stealing their shoes”.

Prosecutor Christopher Knox told the jury that “this is about exploitation”, insisting that Bariana took advantage of men “whom he knew were vulnerable in all cases because they were either homeless, or near homeless, they had drug or alcohol dependencies or both”.

Knox added: “They were, in practical terms, people at a low ebb and were easily bullied, coerced and forced to do work.”

One of the tenants told the court that he gave his £76-a-week housing benefit, plus £20 from other benefits, to Bariana in addition to working free of charge at his takeaways.

Bariana was remanded in custody pending sentencing next month.

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NatWest increases buy-to-let rates

May 15, 2018

NatWest has increased rates on its buy-to-let mortgage deals.

Its two year fixed-rate buy-to-let purchase deal at 60% loan-to-value (LTV) has been increased from 1.61% to 1.83%, while the lender has also increased rates on its two-year deals with higher LTVs.

However, NatWest is reducing the cost of its five-year remortgage buy-to-let deals.

The largest reduction is at 75% LTV, where rates have been reduced from 2.8% to 2.68%, subject to a £995 arrangement fee.

“We have made some adjustments to rates to reflect the current market conditions and balance our mix of business,” said NatWest’s head of sales Mark Bullard.

 

This is the second month in a row that NatWest has raised rates on purchase deals, saying that it reflects ‘current market conditions’.

In April, the lender increased some of its two-year fixed rate BTL purchase products by one to 3bps, while some five-year fixed rate purchases were increased by up to 11bps.

A NatWest Intermediary Solutions spokesman said: “Having reviewed our portfolio we have made some adjustments to rates to reflect the current market conditions and balance our mix of business.”

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Gazumping is on the rise as more than 300,000 property sales collapse

May 14, 2018

Various reports suggest that a number of buy-to-let landlords plan to exit the private rented sector due to concerns about the housing market, changes to tax and more stringent mortgage lending conditions, but selling a property can sometimes be easier said than done.

New research shows that more than 300,000 property transactions collapse every year costing affected sellers just over £2,700 on average.

The study, undertaken by YouGov, on behalf of the HomeOwners Alliance and homebuyer IMMO, found that most property sales fall through every year as a result of buyers changing their minds – collectively costing sellers a total of £400m annually.

According to the survey, which explored the experiences of home sellers, 20% of sellers have experienced a sale collapse, with just over half - 51% - incurring costs averaging £2,727.

Some 69% of the home sales that fell through did so because of buyer related reasons, including the purchaser changing his or her mind, while the often lengthy time it takes to complete a transaction led to 39% of buyers pulling out of an agreed deal because they found another property, while more than a quarter - 28% - of deals fell through because the buyer’s finances were not in order.

Sales falling through further up in a chain accounted for 20% of collapsed sales.

The research, which found that uncertainty may actually put people off selling, shows that almost one in ten sellers - 8% - with a failed sale have experienced gazundering; where the buyer lowered their offer just before the exchange of contracts.

Paula Higgins, chief executive of HomeOwners Alliance, commented: “We often hear about would-be buyers losing their dream homes as a result of sellers accepting higher offers but less is said about sellers forking out thousands in wasted fees only for buyers to change their mind, leaving the seller back at square one”.

“Gazundering and time wasting is a huge problem. The homeselling system is so unreliable it’s deterring homeowners from selling – adding to the ongoing housing shortage crisis as a lack of suitable homes is one of the barriers to people moving up the property ladder.”

The research comes after the government announced plans to improve the home buying and selling process with a number of measures, including the introduction of voluntary reservation agreements.

These legally binding agreements, advocated by HomeOwners Alliance, would require both buyers and sellers to put down a non-refundable deposit to commit both sides earlier in the process.

Commenting on the findings, Samantha Kempe, Co-Founder of IMMO, said: “The current system has created a fundamental power imbalance between the seller and the buyer, with the seller often at the buyer’s mercy during what is often the largest financial decision of their lives.

“Sellers should be able to proceed with the sale of their property knowing what price they will receive and feeling assured that the sale will go through.”

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Government urged to push for longer tenancies

May 14, 2018

With more than a quarter of those in their late thirties and early forties now renting, the Residential Landlords Association (RLA) is calling on the government to ensure the support is in place for landlords to meet the changes in the types of tenants in rented housing.

The research, based on figures from the annual Family Resources Survey, found that the number of middle-aged Britons still renting their homes from private landlords has doubled in the past decade, owed in part to rising house price, leaving many middle-age workers unable to afford a first home.

“With government data showing that rents are increasing by less than inflation and that average weekly rents are lower than weekly mortgage payments, it is not surprising that more older people who are finding it difficult to afford to buy a property are now renting,” said David Smith, policy director for the RLA.

The landlord association wants to see the government help the situation by doing more to enable landlords to offer longer tenancies.

Smith continued: “We recognise that older tenants, especially those with children, want security in rented housing. Although official statistics show that tenants have, on average, lived in their existing rented homes for almost four years, we have called on the government to do more to support the provision of longer tenancies.

“This includes addressing the problem that mortgage lenders often prevent landlords offering longer tenancies with an RLA survey showing that 44% of landlords have mortgage conditions that limit the maximum length of tenancy that can be offered.”

Smith points out that growth in the number of older tenants is one factor behind an increase in demand for rented housing at a time when an increasing number of landlords are not investing in more properties or are selling off homes because of government tax rises on the sector.

“This is making it more difficult in areas of high demand for tenants to find decent accommodation,” he added.

“The government is increasingly asking the private rented sector to house people in categories that it was never intended or structured to do. Ministers need to undertake a comprehensive review to ensure the support is in place for landlords to meet the changes in the types of tenants in rented housing.” 

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North-south rent gap narrows

May 14, 2018

The north-south gap in rental prices is narrowing, as rent hikes ease in the north but pick up in the south of the country, new figures show.

Average rents in the north of England dropped by an average 0.3% in April compared with the same period last year - the first year-on-year decline in rental values since June 2014.

In contrast, rental growth accelerated in the south of England to 2.2% in April 2018, buoyed on by increases in the East of England and London, where rents are up 3.6% and 2.2% respectively.

The data provided by Hamptons International shows that rents in the south increased to an average of £1,372 per calendar month (pcm) last month,  2.2 times more than the average rent of £622pcm in the north.

The Hamptons International Monthly Lettings Index (formerly the Countrywide Lettings Index) also shows that the  average cost of a new let reached £953pcm in Great Britain in April, 1.9% up on the corresponding period last year.

The data from Hamptons shows that since April 2016 landlords have sold 82,000 more homes than they bought in the south, compared to 24,000 net sales in the north, contributing to an overall fall in the number of homes available to rent across Great Britain.

Aneisha Beveridge, research analyst at Hamptons International, said: “Low stock levels in the south continue to drive rental growth as tenants compete for fewer available homes. 

“Since April 2016, the month the stamp duty surcharge was introduced for second homeowners, landlords across Great Britain have sold 88,000 more homes than they bought.  But landlords are finding new ways to maximise their returns by purchasing properties elsewhere, particularly further North in search of lower stamp duty bills and higher yields.

“Across Great Britain rental growth picked up last month to 1.9%, with the East being the top performing region (3.6%). 

“London has seen a reversal of fortunes with rental growth averaging 2.7% so far this year compared to -2.0% in the same period last year.  This growth has been driven by inner London with average rents rising 4.1% so far this year.”

North/South rents and stock levels

 

 

Average Rent (pcm)

Rental Growth YoY

Change in the number of homes available to rent levels (Apr 18 v. Apr 16)

North

£622

-0.3%

19%

South

£1,372

2.2%

-16%

Great Britain

£953

1.9%

-5%

Source: Hamptons International

 

 

New Lets (pcm)

 

 

Apr-18

Apr-17

YoY

Greater London

£1,673

£1,637

2.2%

    Inner London

£2,597

 £2,549

1.9%

    Outer London

£1,497

 £1,464

2.3%

South East

£1,034

 £1,014

1.9%

South West

£786

 £777

1.2%

East

£946

 £913

3.6%

Midlands

£671

 £656

2.4%

North

£622

 £623

-0.3%

Scotland

£584

 £617

-5.3%

Wales

£656

 £634

3.4%

Great Britain

£953

 £ 935

1.9%

Source: Hamptons International

 

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Rogue letting agents fined £14k for unlicensed HMOs in Camden

May 14, 2018

Two letting agents have been hit with £14,000 fines for unlicensed shared properties in Camden, north London.

The two rogue letting agents were prosecuted and fined at Highbury Corner Magistrates Court, as part of Camden Council’s ongoing action against those operating unlicensed houses of multiple occupation (HMO) in the borough.

Enjoy London Ltd and its director, Antonio Scarpignato, of Keighley Close in Holloway, pleaded guilty to operating unlicensed HMOs at Denton on Malden Crescent, and also at Alpha Court on Raglan Street. Enjoy London was fined £4,000 with costs, and Scarpignato fined £2,000 plus costs.

Another letting agent from Westminster was found guilty in his absence and fined £3,000 plus costs for also operating the unlicensed HMO at Alpha Court.

An investigation by Camden Council officers found that the rooms at both properties had been poorly sub-divided, creating small cramped living spaces.

There was also fire safety regulation breaches present at the Alpha Court flat with smoke alarms missing, with the sub-division creating a potential fire trap.

Enjoy London Ltd and the letting agent were fined an additional £2,000 and £3,000 respectively in court for these management breaches – taking the total fines related to the two properties to £14,000.

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Buy-to-let is still an attractive long-term investment

May 11, 2018

Buy-to-let investment in the long-term is still likely to beat savings rates by a significant margin over the coming years, despite recent regulatory and taxation changes, new figures suggest.

Fresh data from Kent Reliance shows that over the course of a 25-year investment, a basic tax paying landlord, placing a typical 30% deposit of £73,908 on a property, would generate a total profit of £265,500 after all costs and taxes.

Accounting for the impact of inflation over the period, this represents a profit of £162,000 in today’s money, or £6,475 annually.

John Eastgate, sales and marketing director of OneSavings Bank, commented: “The buy-to-let market is undergoing a sea change. Regulatory and taxation changes have altered the market dynamic, reducing its attractiveness to amateur landlords, and increasing the tax bills of higher-rate investors.

“In spite of rising costs, there are still healthy returns to be found in property for committed investors.”

Eastgate points out that the “days of speculation” are gone. He says that it is important for buy-to-let landlords to adopt a long-term business plan when investing in the sector.

He continued: “Investors must be prepared to undertake business and tax planning, understand the risks as well as the rewards, and, most importantly, the responsibilities they have towards their tenants.

“Policy change remains a threat, however it is essential that the role of professional landlords in providing vital housing stock is not undermined.  Without them, the supply of housing in the sector would naturally shrink, leading to higher rents for a growing number of tenants competing for accommodation.”

The figures vary substantially from region to region across Great Britain, driven by significant differences in house prices, yields, and importantly, the initial deposit investors must place.

While investors in London may see by far the largest total profit in cash terms, nearly £308,000 in today’s money, they must also supply an initial deposit of twice that of the national average, and face much higher costs.

Region

Typical Deposit

Initial rental income pa

Total rental income

Total Capital Gains

Total Costs

Total Profit

Profit in Today's Money

London

£158,225

£19,416

£707,876

£576,878

£779,633

£505,121

£307,887

East of England

£70,153

£8,844

£322,451

£255,774

£343,955

£234,270

£142,795

South West

£60,864

£8,245

£300,614

£221,905

£305,416

£217,103

£132,331

Yorkshire and The Humber

£37,712

£7,032

£256,364

£137,494

£213,033

£180,824

£110,218

North West

£36,883

£7,090

£258,514

£134,472

£211,102

£181,884

£110,864

Wales

£37,835

£5,112

£186,398

£137,943

£188,218

£136,122

£82,971

South East

£81,301

£9,964

£363,274

£296,417

£395,925

£263,766

£160,774

North East

£29,512

£4,389

£160,027

£107,597

£151,618

£116,006

£70,709

West Midlands

£45,027

£7,260

£264,693

£164,166

£240,186

£188,673

£115,002

East Midlands

£44,759

£7,588

£276,665

£163,188

£243,617

£196,236

£119,612

Scotland

£52,819

£8,710

£317,557

£192,574

£284,678

£225,454

£137,421

Great Britain

£73,908

£10,134

£369,495

£269,464

£373,309

£265,650

£161,922

 

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Landlord ordered to pay more than £45,000 for substandard housing

May 11, 2018

A rogue landlord who pleaded guilty to 45 charges relating to properties he owned in Wirral has been fined £32,000 and ordered to pay £13,611.60 costs at a hearing at Liverpool Crown Court.

In a prosecution brought by Wirral Council under the Housing Act 2004, the landlord, Gary Fixter, from Chester, pleaded guilty to the 45 offences, which involved failing to comply with improvement notices, breaches of Houses in Multiple Occupation (HMO) management regulations and failing to produce documents upon request.

The offences related to Fixter’s ownership and management of two HMOs, one on Alexandra Road in Birkenhead, the other on Rake Lane in Wallasey, as well as a self-contained flat on Grange Road, West Kirby.

Each property was found to be in serious disrepair, while there was also evidence of inadequate property management during inspections by Wirral Council's Housing Standards Team, which led to several improvement notices being served.

Among the more serious hazards uncovered by the inspection included longstanding penetrating dampness, defective fire alarm systems placing the occupants lives at risk by compromising their ability to escape the building in the event of a fire and dangerous and untested electrical installations requiring substantial works to make them safe.

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Foundation Home Loans has cut rates across its BTL range

May 11, 2018

Foundation Home Loans has improved its product offering, with a series of price reductions across its buy-to-let product range aimed primarily at portfolio and non-portfolio landlords.

The new product line offered by Foundation Home Loans includes a two-year fixed rate deals starting at 2.79% and five-year fixed rate products starting at 3.44%.

These products are available at an interest cover ratio (ICR) of 145% x pay rate for individuals and 125% x pay rate for limited companies.

The specialist lender, available only through intermediaries, has also upgraded its HMO five-year fixed rate offering which now starts from 3.54%. The rental stress calculations are the same as its other buy-to-let products, for example 125% x pay rate on a five-year fixed rate for a limited company borrower.

Andrew Ferguson, commercial director at Foundation Home Loans, commented: “Within the market place, we are becoming recognised for our limited company and portfolio landlord proposition and wanted to make absolutely sure the needs of our landlord clients were being met.

“With our limited company range offering a competitive ICR of 125%, we anticipate our products will continue to draw mass appeal.”

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New build-to-rent scheme launched in Shoreditch

May 11, 2018

A new build development of eight luxury flats has come on to the rental market in Shoreditch, east London.

The new homes, located in the Shoreditch Village development, are available to rent through Knight Frank.

‘The Eight’ development is made up of a mixture of two and three bedroom flats ranging from 973 sq ft to 1,334 sq ft with prices starting from £995 per week, which is likely to have a knock on effect by pushing up rental values in the local area, certainly for properties that are finished to a high standard.

Dominic White, managing director of Shoreditch Village, said: “The unveiling of The Eight marks the latest step in our vision to deliver a vibrant public space. Residents will benefit from a retail mix of new and emerging brands, as well as being within ‘walk-to-work’ proximity to the array of sectors that Shoreditch is known and shaped by.”

Jennifer King-Neary, head of Knight Frank’s Aldgate letting office, added: “This is the ultimate in modern living at the heart of east London. The apartments have been beautifully designed and offer residents everything they could want from shops and restaurants to relaxation as well as an easy journey into the City and central London. This development offers people a lifestyle, not just a place to live.”

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Buy-to-let activity is ‘alive and kicking’

May 10, 2018

The buy-to-let market in London and the South East has seen stronger levels of activity since the start of the year after a very quiet end to 2017, according to Commercial Trust Limited.

The latest report from the specialist buy-to-let broker shows that mortgage applications from BTL investors in the capital increased for the first time since the second quarter of last year, growing from 12.4% in Q4 of 2017, to 16.5% in Q1 2018.

Data from the broker shows that overall the South East still leads the way, having also grown its market share from 17.2% in Q4 of 2017, to 19.2% in Q1 of 2018. This means that London has also closed the gap on the South East’s overall market share.

But the biggest increase in market share, quarter-on-quarter, was recorded by the East Midlands, which saw a 5% hike in the first three months of this year.

Scotland and Wales also saw an upsurge in market share over the corresponding period by almost 2%.

Overall, London and the South East still make up a significant proportion of the buy-to-let application market share.

Andrew Turner, chief executive at Commercial Trust Limited, commented: “From our latest quarterly data, it is clear that property investment in London and the South East is very much alive and kicking – and if anything, growing.

“The report perhaps also reflects the effect of the introduction of the 3% stamp duty surcharge in April 2016, which of course would have been more keenly felt by investors in the more expensive properties found in this part of the country.

“London and the South East remain regions of high demand for rental property and a recent article from City AM indicated that property prices in the capital have continued to fall, perhaps creating something of a buyers’ market for investors.

“I think the data also reflects a regained sense of confidence in London and the South East, among landlords with capital to spend.

“Similarly, the North West continues to see significant infrastructure investment and projects like HS2 will have the potential to further enhance opportunities for economic development in the long term. This in turn may attract more businesses, creating jobs, migration and further rental demand, whilst at the same time potentially contributing to property price growth.”

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A quarter of landlords have the wrong property insurance

May 10, 2018

Often the best way for a landlord to protect themselves, their property and indeed their tenants is to take out appropriate landlords’ insurance, which differs from standard home insurance as it generally does not cover any claims made against a buy-to-let property; leaving the actual property, its contents, the landlord and the tenants occupying the dwelling vulnerable.

According to a new study by Simple Landlords Insurance, a quarter of residential landlords in the UK unwittingly have the wrong insurance, having mistakenly insured their properties with a standard home buildings and contents policy.

It is important that landlords understand that renting a property is a business and standard home insurance may leave them vulnerable and open to injury claims from their tenants, according to Tom Cooper, director of underwriting at Simple Landlords Insurance.

He said: “Those who have bought a home policy clearly want to protect their investments but have unfortunately mis-bought a policy that doesn’t give them the protection they need.

“A home insurance policy will not cover you for loss of rent, it will not cover you for legal fees in the event you need to pursue an eviction, and it may altogether void any claims you have to make. Any property is going to be the biggest investment you make – and not protecting that properly could cost you dearly.”

A further 3.5% landlords surveyed said they did not have insurance and 4% were not sure if they had insurance or not, while 41% reported buying specialist landlord cover.

The remaining quarter of landlords could reduce their insurance spend by avoiding duplicate cover as 25% said they bought both specialist landlord and standard homeowners cover, suggesting they did not understand that landlord insurance also covers the risks to buildings common to both owner-occupied and rented properties.

Most landlords said price was a very important factor in their choice of policy (86%), hotly followed by good cover in their policy (85%) and the availability of additional covers such as home emergency or malicious damage by tenants (70%).

Cooper added: “High quality insurance, at the right level for your personal risk can help free landlords to diversify their strategies and think differently about how, when and where they invest.

“Whatever the reason, landlords - especially those with growing portfolios - are put off by the complication of moving their insurance. But it’s always worth shopping around to get the right cover at the best price, and the burden of administration is usually taken on by the insurer.

“Even if you’re not swapping, you should never accept an unjustified hike in price. Unless something has changed significantly at your property or you’ve had a major claim, year on year you shouldn’t be seeing your premium go up by more than about 5%.”

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Grainger acquires Southampton PRS scheme for £27m

May 10, 2018

Grainger plc, the UK’s largest listed residential landlord, has purchased a Private Rented Sector (PRS) build-to-rent development on East Street, an historic part of Southampton’s city centre, from the National Regional Property Group, the property developer behind Southampton’s first private rental scheme, the Fruit and Vegetable Market development.

The site, which has planning permission for the construction of 132 private rental homes, has been acquired for £27m.  

Aiden Murray, planning consultant in the planning team at JLL in Southampton, advised National Regional Property Group on the plans.

He said: “This major regeneration scheme will be an important part of the jigsaw of the transformation of this up-and-coming part of Southampton city centre.

“It is excellent to see National Property Group continuing to invest in the area, which is identified by the city council as in need of regeneration, and to see one of the country's biggest professional landlords, Grainger, commit to owning and managing the new apartment building for the long term.

“This will be the second PRS scheme to be built in Southampton, showing that building specifically for the rental market, which we have seen in major urban hubs such as London, Manchester and Bristol, is now reaching other regional cities. It meets a growing demand from a wide range of renters seeking well managed housing schemes that are within easy reach of key facilities, employment opportunities and transport links.”

Allan Gordon, managing director at National Regional Property Group, is pleased to see a disused site transformed into much-needed, new housing.

He said: “We're hugely proud of the success of the Fruit and Vegetable Market development, and are committed to continuing to regenerate the area, breathing new life into the areas of the city centre that have fallen behind.”

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Property crowdfunding attracting more international investors

May 10, 2018

There has been a sharp rise in the number of overseas investors investing in UK crowdfunding development projects, including buy-to-let schemes, according to Shojin Property Partners.

The company has seen a 52% jump in overseas individuals investing in UK crowdfunding development projects, since launching their platform last year.

Most of these buyers are from the Far East, Middle East and East Africa and attracted by the weak pound and the hands-off investment that crowdfunding offers.

International investors now account for almost 43% of all people who invest in crowdfunded development projects with Shojin, with the most popular investment projects for overseas investors proving to be high yielding equity investment opportunities.

UK property has long appealed to international property investors, as reflected by research from Hamptons International which shows that 30% of homes across London were sold to international buyers last year.

Jatin Ondhia, CEO of Shojin Property Partners, said: “International investors have always considered the UK property market to be one of their top asset types, as it offers them a safe and secure investment.

“London is particularly attractive to overseas investors now, thanks to falling property prices and great capital growth potential over the next 10-15 years. Property in the capital has always been a stable asset and we have seen a large spike in overseas investor demand for our development projects in London.

“We have recently launched new investments products featuring bridge loans, mezzanine loans and buy-to-let which will allow investors to spread their risk across the entire investment spectrum and diversify their property portfolios.”

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Top buy-to-let tips from Together

May 10, 2018

Despite changes to tax relief for residential landlords, buy-to-let remains a popular choice, supported by record-low mortgage borrowing rates, solid demand from renters and stable yields.

Despite a challenging period for the buy-to-let market, characterised by tax and regulatory changes, investment in buy-to-let continues to outperform most major asset classes, thanks in part to the fact that some investors are taking steps to weather the changes, including switching to short-term holiday lets or commercial property, or putting their residential portfolios into limited companies.

To help guide you, specialist lender Together has compiled the following top tips for negotiating the ever-changing buy-to-let landscape.

Do your homework

With the government’s plans for the buy-to-let sector, doing your homework is critical. Mortgage interest tax relief is currently being withdrawn in stages, to be replaced by a 20% credit. Also, landlords have had to pay an extra 3% stamp duty on property purchases.  You need to be able to adapt to the changes and to ensure you’re getting financial advice on your own tax position and the impact the changes will have, so you should monitor industry news to keep up with new developments or hot topics to ensure you have all the latest updates.

Work out rental yields

The rental yield is the annual rental income as a percentage of the property value. Therefore, understanding the potential profitability will help you identify the types of properties and locations that will best suit your budget.

Before you start looking for new properties, sit down with a pen and paper and think about your budget and the rent you are likely to get. Also, don’t forget factors such as maintenance costs.

Location is key

Major infrastructure projects, as well as local developments, can greatly affect the money landlords can make on their investment. The current desirable areas for renters are usually well-known, but an up-and-coming area could be a great opportunity, so you might want do a bit of background research. Think about whether a town is in a commuter belt, or is near well-regarded schools or good hospitals.

As a landlord, you will need to live nearby to deal with maintenance problems, or pay a letting agent a management fee to field calls from tenants. You will also have to carefully choose an area popular with renters to ensure the property doesn’t stand empty.

Choose the right property

You will need to research the local market and get to know which areas are popular for different types of renters, such as families or students. For example, in town centres it may be easier to rent out a one-bedroom flat, whereas a three-bedroom terrace is likely to work better in a family neighbourhood. Also, think about the tenants you are looking to target. If they are professionals, for example, they may be looking for a modern, stylish home, while families might want a bit more space.

Securing finance

Unless you are a cash buyer, you will need a buy-to-let mortgage. There are a number of specialist lenders, like Together, that will consider buy-to-let mortgages on properties such as those in need of renovation, that the mainstream banks may not.

Many specialist lenders also deal with a broader range of applications; from those with complex income streams and retired people, to those with a less-than-perfect credit rating, to give just a few examples.

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Buy-to-let remains a ‘popular’ and ‘dependable’ investment

May 9, 2018

With the outlook for savers looking dismal, many people continue to invest in the tried and tested route of bricks and mortar which generally offers high returns, especially as far as the buy-to-let market is concerned, as many investors benefit from both rental yields and sometimes increasing property prices.

Although returns have fallen in recent years, investment in buy-to-let continues to outperform major asset classes, despite the various economic and political headwinds that the sector has faced of late.

According to the latest HomeLet Rental Index, the average cost of a new tenancy in the private rental market in the UK rose by 1.5% to £918 per month in April, helping to boost rental income for buy-to-let landlords, which increased by 8% in the last tax year from £15bn in 2014-15 to £16.2bn in 2015-16, according to ludlowthompsow estate agents.

The London-based agency says the figures, based on HMRC data, show that buy-to-let properties remain among the highest yielding mainstream investments in this country.

Stephen Ludlow, chairman at ludlowthompson, said: “Buy-to-let-properties continue to prove themselves one of the most popular and dependable investments around.”

“There are very few, if any, other investments that offer investors a regular monthly income on top of capital growth.”

“Although the market has cooled in recent months, there are still huge growth opportunities in the buy-to-let sector in the long-term, with the pool of potential tenants getting larger each year. The fundamental supply/demand imbalance remains.”

He added: “London in particular continues to see increasing demand for rental properties, and as long as that continues buy-to-let investors are in an extremely strong position.

“Growth in wages like we are seeing today has also historically led strong growth in rental values, so the opportunity for investors in buy-to-let properties is still there.”

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Third of landlords thinking of quitting BTL sector due to ‘challenging’ tenants

May 9, 2018

MakeUrMove is warning that a significant number of buy-to-let landlords are thinking about quitting the private rented sector due to problem tenants including those that fail to pay their rent and cause property damage, resulting in a repairs bill that can run into the hundreds if not thousands of pounds.

A new survey commissioned by online letting agent has found that almost half - 47% - of landlords have had issues with tenants who do not pay the rent on time, while around a quarter of landlords have also faced significant bills when tenants have left properties in a state of damage and disrepair.

One landlord surveyed was left with £16,000 worth of damage after a rogue tenant left a property.

The tenancy security deposits that tenants leave with landlords or their letting agents will soon be capped at a maximum of six weeks rent, in accordance with the Tenant Fees Bill introduced into Parliament last week, but many landlords said that damage caused by tenants far outstrips the sum of the deposit usually taken at the start of the tenancy.

Problem tenants is a concern for 37% of the landlords surveyed, while 26% identified tenants breaking items and refusing to pay as a concern, as is extra people living in the property who are not on the tenancy agreement (22%), and tenants refusing to leave at the end of their tenancy (16%).

Alexandra Morris, managing director at MakeUrMove, pointed out that 60% of landlords in this country are ‘accidental’ or ‘casual’ landlords, meaning they only have one property and rent it out to supplement their main working income. However, she believes that stress and financial pressures caused by what she termed “challenging” tenants is a sure fire way to put them off and steer them away from further investment.

Morris said: “Generally, as long the rent is coming in every month to cover mortgages and other associated costs, smaller ‘casual’ landlords don’t often plan for bigger costs caused by damage from tenants or lack of funds due to unpaid rent.

“As a result, when a big outlay comes around, some landlords find themselves in trouble, and there’s very little protection offered from the government against these things.”

He added: “Legislation is currently swinging towards tenants, at the risk of undermining the vital role played by private landlords in the UK housing market.

“Legislation such as the proposed deposit cap could make it even harder for private landlords to deal with challenging tenants, resulting in further pressures on landlords to sell up.

“Whilst landlords selling their properties may appear to offer some short term benefits for buyers, it cannot deal with the systemic problems surrounding the lack of housing supply.

“It will also reduce supply in the rental sector, which will increase demand and likely only increase pressures on the remaining landlords to increase rents.”

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BTL mortgage rates continue to fall

May 9, 2018

Mortgage lenders have cut their rates for buy-to-let investors looking for deals in a bid to attract landlords.

The cost of a typical five-year fixed rate buy-to-let mortgage has fallen since the start of the year, according to a new mortgage tracker launched by Property Master.

According to the digital start up, which uses algorithms to match requirements of individual private landlords against products available in the buy-to-let mortgage market, two-year fixed rates based on 65% of the value of the property and 75% of the value of the property have also declined since the start of 2018.

Only two-year fixed rate mortgages for 50% of the value of a buy-to-let property increased over the five-month period and then by 0.42%.

Angus Stewart, chief executive of Property Master, commented: “This is quite a significant increase and perhaps reflects that there are fewer lenders discriminating at the 50% LTV level.  Lenders are clearly taking margin here and giving back on other LTV levels.”

“Our findings show that there are some very good deals out there for landlords despite worries over any future increase in base rates.”

Property Master’s findings come on the back of recent research revealing that the number of buy-to-let products currently on the market has reached a record high, and Stewart believes that landlords could be benefiting from “unprecedented competition amongst lenders for their business”.

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Landlords adopt ‘wait and see’ approach due to market uncertainty

May 9, 2018

Almost half of private landlords have opted to wait to see what impact Brexit and regulatory changes will have on the buy-to-let market over the next 6-12 months before they put any measures into place.

Fresh research carried out by Shawbrook Bank found that 49% of landlords are planning to wait up to a year before deciding what action to take next.

According to the bank’s latest ‘BTL Barometer’, 22% of landlords cited regulation changes as the biggest challenge in today’s market, 21% identified interest rate movements and 16% cited lending restrictions.

Karen Bennett, managing director of Shawbrook Bank Commercial Mortgages, said: “Stricter affordability tests for portfolio landlords and interest rate rises will make it harder for some to get funding and this month will also see the next phase of reductions in tax relief for buy-to-let, further hitting landlords' profits.”

When it comes to regulatory challenges, the change that has most affected landlords is the reduction on the tax relief for buy-to-let mortgages, with 52% of landlords saying this had the biggest impact.

Landlords said the 3% stamp duty surcharge was the second biggest regulatory change that has had an impact, with 21% feeling the effect of this.

To counteract the changes, some landlords are looking for ways to protect their portfolios, with 33% of landlords surveyed having already, or are planning to, set up a limited company, while 18% intend to re-mortgage and 19% are looking to sell their properties.

Bennett continued: “It is encouraging to see professional landlords adapting their strategy in line with regulatory change, thereby helping to ensure the long-term sustainability of the industry.

"We have seen a slight cooling as landlords evaluate their options, not rushing into purchases and holding existing property. It is important to recognise however, that buy-to-let remains a crucial component in the wider UK housing landscape, and data suggests that although investors may tread carefully throughout 2018, they retain confidence in the fundamentals of this market.”

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There are ‘substantial discounts to be had’ in London

May 9, 2018

It is undoubtedly a buyer’s market in London at the moment, with those who are looking to buy property in the capital having become intensely price-sensitive and pragmatic, expecting vendors to be more realistic about asking prices, or be prepared to negotiate, in order to achieve a sale,

Many committed sellers now understand the need to factor in market uncertainty into their price expectations in order to attract cautious purchasers, as reflected by recent data published by Coutts revealing that more than half - 53% - of prime property is being sold below asking price, compared to 42% last year, with buyers securing an average of 12.1% off the asking price.

“There are substantial discounts to be had,” said Camilla Dell of buying agency Black Brick. “We have averaged a 9% reduction on asking prices this year, with this month’s acquisition of the month reaching 19%.”

But despite the recent slowdown in the housing market in the capital, there remains plenty of demand from prospective buyers both from the UK and overseas, with many international purchasers, attracted to the weakened sterling against the dollar and the euro, continuing to view London as a safe bet.

However, there are considerable challenges in negotiating effectively, no matter how experienced the investor is, according to Dell.

She added: “It’s very easy to be overly aggressive and alienate the vendor. Every negotiation is different – there’s no rule book.”

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Landlord recognised for ‘outstanding service’

May 8, 2018

Elaine Kellington from Kelso in the Scottish Boarders has been named ‘Landlord of the Year’ at the HomeProtect Landlord of the Year Awards 2018. 

Designed to find and recognise landlords from across the nation who go above and beyond in offering a high standard of living for their tenants, the awards shine a spotlight on some of the very best buy-to-let landlords in Britain.

After being nominated and going through a tough judging process, which included asking tenants to share their real-life landlord experiences, Kellington beat off tough competition to be named the best private landlord in Britain.

The nominations were narrowed down to a 10-person shortlist, which was carefully considered by founder of Marks Out Of Tenancy, Ben Yarrow, editor of Landlord Today, Marc Da Silva, and HomeProtect CEO Mark Eastham.

Since becoming a landlord a decade ago, Kellington has welcomed more than 30 tenants into her portfolio of homes.

“I feel extremely privileged,” she said. “I know there are lots of landlords who do a fantastic job, so to be chosen as Landlord of the Year was such a surprise.”

“I pride myself on developing a balanced relationship with my tenants, combining business acumen and professionalism with being approachable and setting clear procedures and lines of communication. I also believe it’s important to have a flexible mind set and the ability to understand and empathise at times.”

“Getting this award gives me so much gratitude knowing my tenants have taken the time to nominate me and genuinely appreciate all that I do!”

HomeProtect CEO Mark Eastham said: “On behalf of the team I’d like to say congratulations to our winner Elaine! I’d also like to thank everyone who got involved as the quality of nominations has been phenomenal with many tenants getting in touch to say just how grateful they are of the outstanding service their landlord provides. I can confidently say our first Landlord of the Year Award was a tremendous success.”

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Tenants fork out more than £1bn a year in repairs

May 8, 2018

Renters are spending more than £1bn of their own money every year on repairs their landlords failed to carry out, fresh figures suggest.

The study found people living in rented accommodation paid on average £217 per household on repairs that should have been carried out by their landlords in the past year.

Common items that required fixing include boilers (37%), baths, showers (29%) and toilets (26%).

The survey also revealed that many renters do not completely trust their landlord, while one in 100 claimed to have found hidden cameras in their home.

One in five - 21% - of renters said their relationship with their landlord is so bad it has affected their physical or mental health.

The research, carried out by Uncle - a serviced apartment start-up – also revealed that one in 10 tenants have been made to wait more than three months to get ‘routine’ jobs done while one in five have waited more than a month.

Separate figures from the English Housing Survey show that more than a quarter – 27% - of privately rented homes failed to meet the decent homes standard in 2016, while 8% of properties also had some type of damp problem.

Under powers introduced earlier this year, councils can enforce fines of up to £30,000 to private landlords for offences such as failing to license a property, or not complying with an improvement notice.

However, there are currently no guidelines for magistrates when sentencing for housing offences. Magistrates base their decision on how much a landlord says they can afford, rather than the seriousness of the offence or the harm caused to tenants.

The Local Government Association (LGA), which represents 370 councils in England and Wales, argue that higher fines for serious cases such as for fire safety breaches or providing substandard housing  would raise standards and provide consistency across the courts.

Cllr Martin Tett, LGA housing spokesman, said: “The majority of landlords are decent, responsible law-abiding citizens who do a great job in making sure their tenants are living in safe and quality housing. Unfortunately there is a minority of rogue landlords who give those good landlords a bad name.

“Councils want to work with landlords, not against them. But with more young people and families renting privately than ever before, we need to see reforms that will maintain and improve housing standards.

“A key deterrent to rogue landlords would be for the government to set common sentencing guidelines which delivers consistency across the courts. It is not right that the level of civil penalty could outweigh that which is handed out by magistrates.

“Many councils are already tackling issues in the private rental sector by bringing in landlord licensing schemes. But they are limited in how widely these can be introduced. We need to see these rules relaxed and councils given more freedom and flexibility in establishing schemes.

“Landlord licensing schemes allow landlords to demonstrate that they are responsible and adhere to ensuring homes are maintained to a high standard. It also protects and provides reassurance to tenants that they are living in a decent, safe and secure home.”

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UK rents continue to rise in April says HomeLet

May 8, 2018

Rental prices increased by 1.5% in April compared to the corresponding month a year earlier, according to the latest HomeLet Rental Index.

The average rent agreed on a new tenancy signed in April was £918 per calendar month (pcm).

When London is excluded, the average UK rental value was £761pcm in April, which is up 0.9% on last year.

On an annualised basis, rents rose in nine of the 12 regions monitored, led by gains in London where rents are up 4.5% year-on-year to reach an average of £1,588pcm.  

Scotland saw rents rise 3.3%, while the West Midlands (2.7%), East Midlands (2.5%) and Northern Ireland (2.3%) also saw strong gains.

Elsewhere, the North West (2.2%), Yorkshire & Humberside (1%), South West (0.7%) and East of England (0.3%) also saw growth in rents.

Wales saw the biggest drop in rents at -2.1%, while rents also fell by -0.4% in the North East and South East of England.

While landlords should be mindful of tenants’ ability to pay higher prices, it would appear that rental prices may yet offer room for growth, especially in light of recent tax changes, including the existing phasing out of mortgage interest relief.

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Coventry for intermediaries reduce rates across its BTL range

May 8, 2018

Coventry for intermediaries has cut rates across its range of buy-to-let mortgages in a bid to remain competitive.

The lender has reduced rates across its two, three and five-year fixed rate buy-to-let range by up to 0.2%.

Highlights include a two-year fixed rate buy-to-let mortgage at 1.75% and a five-year fixed rate at 2.65%, both available at up to 75% loan-to-value (LTV) with a £1,999 product fee.

Two-year fixed rate Mortgage Early Repayment charges (ERC) are at 2% for the first year and 1% in the second year.

Five-year ERCs are 5% for the first year, then 3% for the next two years and 1% over the last two years of the term.

Kevin Purvey, director of intermediaries, commented: “We’re delighted to reduce rates across our buy-to-let two, three and five year fixed ranges which feature competitive rates, LTVs from 50-75% and a standard valuation included up to £700.

“These products also include our remortgage transfer service for landlords looking to move to a competitive fixed rate – something that’s definitely worth considering in this current climate of uncertainty.”

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Why Nottingham appeals to buy-to-let investors

May 8, 2018

Located in a central position of the UK, Nottingham is a fantastic city with a population of more than 350,000 people, home to two major football clubs, fantastic leisure complexes, large shopping centres, two universities and the legend that is Robin Hood.

Over recent years, Nottingham as a city has become one of the most popular cities for buy-to-let investing, attracting interest from investors on a national and international stage. However, what many people are hoping to learn is just why Nottingham has become so popular within the world of property investment.

A central UK location

Nottingham is located centrally within the UK, offering great transport links for both residents and businesses to benefit from.

With 90% of England’s population able to access the city within two hours of travelling by car or by train, Nottingham presents itself as a great place to be.

The city boasts a busy train station, of which has a direct train services to London each and every day, reaching the capital in just 90 minutes.

As part of the East Midlands, Nottingham is close to the East Midlands Airport, which has flights to 150 countries worldwide, something that is a major plus point for international business owners.

The city of Nottingham is also set to undergo a £1bn investment project to improve the transport available within the city. Plans suggest that a redeveloped railway station and transport hub, as well as two more train lines will be introduced to the city, making it even easier to travel.

Nottingham benefits from waves of young professionals

With 25% of the population aged between 16 and 24, Nottingham is considered as a young city that benefits from a large amount of young workers that possess a high skills base. Nottingham is home to two world renowned universities, with approximately 70,000 students, meaning that Nottingham is the 4th largest University City in the whole of the UK.

Nottingham Trent University and the University of Nottingham are both fantastic universities, recognised on the international scale for the work that they have done in both research and collaborations with businesses from across the world.

Approximately 20,000 students graduate in Nottingham each and every year, meaning that businesses within the city can benefit from ambitious and qualified graduates looking to work within the city. The universities are going from strength to strength, and growth in numbers of students attending university within the city is expected to continue.

Nottingham is a great place to be

The city has made great strides in improving itself over recent years, and is considered by many as a great place to live, work and study.

Surrounded by a beautiful countryside, including both the Peak District and Sherwood Forest, Nottingham is known as the most energy self-sufficient large city in the UK, and also has a great transport infrastructure that makes navigating in and around the city very easy.

With a booming economy and great city prospects, Nottingham is also the place to be for retail and leisure facilities, boasting bustling districts that house restaurants, bars, clubs and pubs for all to enjoy.

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

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HMO property continues to deliver the best yields

May 4, 2018

HMO properties produced the highest yields in the first quarter of 2018, at 7.1% - 1.3% above the market average, according to fresh research from Precise Mortgages.

Yields on multi-units, such as blocks of flats, came a close second in Q1 2018, generating an average yield of 6%.

Across all property types average yields fell marginally in Q1 2018 to 5.8% from 5.9% in the last quarter of 2017 and are now at the same level as Q1 2017.

Professional landlords continue to achieve the highest yields, reflected by the fact that those who currently own a portfolio of between 11 and 19 properties are achieving an average yield of 6.7%.

By contrast those who own just a single property achieved yields of 4.8%.

On a regional basis, landlords with portfolios in the North West reported the highest rental yields at 6.7%.

Somewhat unsurprisingly, landlords with central London portfolios achieved the lowest average yields at 4.8%.

Alan Cleary, managing director of Precise Mortgages, commented: “As HMOs attract multiple tenancies, gross rental income tends to outstrip single lets and rental income is more secure even if one tenant leaves a void.

“Experienced landlords are looking to rebalance their portfolios and there is a real opportunity for brokers to support them to work with specialist lenders who are prepared to be flexible and have expertise across the widest product set.”

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Tenant Fees Bill ‘could lead to rent rises’, says RLA

May 4, 2018

The government’s Tenant Fees Bill now introduced to the Commons is a ‘missed opportunity’ to make quicker and more lasting improvements in the rental market, according to the Residential Landlords Association (RLA).

The Bill, which comes as part of reform of the private rental sector, means that tenants are now one step closer to seeing letting fees banned. But the RLA argues that changes should have been made to better enforce existing regulations designed to improve transparency around letting agent fees.

Since May 2015 the law has compelled letting agents to publish details of the fees they charge. Agents breaking this law can be fined up to £5,000.

However, according to data published last year by the National Approved Letting Scheme, 93% of councils had failed to issue a single financial penalty to a letting agent for breaching the law.

There are now concerns among some experts that the fees ban will simply shift the cost of all letting agent fees on to landlords, and if that were to happen, it would leave most landlords with no choice but to further increase rents, as letting agents look to pass existing tenant fees onto landlords.

“With warnings that the policy could lead to rent rises, there is a very real danger that whilst the cutting the upfront cost of renting, tenants will find themselves paying them through higher rents on a permanent basis,” said the RLA’s policy director, David Smith.

Instead of banning letting agent fees paid to tenants, the RLA is calling for immediate action to better enforce the law as it currently stands. This includes the government using powers it has so far failed to use to force agents to display the fees they charge in more prominent positions and specify them in much greater detail.

“Laws without proper enforcement serve only to let tenants and good landlords down,” Smith added.

He continued: “Rather than pressing ahead with plans for more legislation in the sector that will take time to be considered by parliament and enacted, ministers could achieve a greater and earlier impact by using the powers they already have to improve the transparency of fees charged by agents.”

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Landlords in central London most likely to reduce rents

May 4, 2018

Buy-to-let landlords in central London were the most likely to have reduced rents in England in the past 12 months, fresh research from Paragon shows.

The survey of 1,043 landlords carried out by BDRC on behalf of Paragon found that fewer landlords in central London reported tenant demand to be stable or increasing than in any other region, while more than a quarter were likely to have reduced rent in the last 12 months.

The study found that landlord confidence overall had remained confident or increased in the first quarter of 2018 compared with the corresponding period last year.

Landlords in the east of England were most positive about the future, with over half - 53% - of those surveyed indicating that they felt upbeat about the prospects for their own lettings business over the next three months.

By contrast, landlords in central London were the least optimistic, with just 26% rating prospects for their own business as good or very good over the next three months.

John Heron, managing director of mortgages at Paragon, commented: “After an unprecedented level of change, it’s encouraging to see landlord confidence stabilising this quarter.

“At a regional level, the East of England and the Midlands look well supported, with encouraging data on tenant demand, yield and capital gains while the London market adjusts its footing after many years of strong growth.”

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Cost of 5-year fixed BTL rates continue to fall

May 4, 2018

The pricing of five-year fixed rate buy-to-let mortgage products continued to fall in the first quarter of the year, according to the latest Buy to Let Mortgage Index published by Mortgages for Business.

There was a surprising drop in costs despite a steady increase in five-year swaps, suggesting that mortgage lenders chose to reduce their margins to remain competitive.

The findings from the index also reveals that the costs were absorbed across low, medium and high loan-to-value products, making five-year fixes even more attractive to landlords looking to lock-in to low interest rates.

Knowing exactly how much monthly mortgage is going to be for the next five years, no matter what happens to the Bank of England base rate, will certainly appeal to many buy-to-let landlords, especially during times of political and economic uncertainty, caused in part by Brexit.

Over the quarter, the average pricing of rates available to landlords borrowing via limited companies also fell except on five-year fixed rates which increased by 10bps from 4.2% to 4.3%.

Although the number of lenders offering products to corporates remained unchanged at 16, the total number of products available increased by 1%, lifting availability to 25% of the entire market.

The index also found that number of lender arrangement fee-free buy to let mortgages grew for the fourth consecutive quarter.

Almost one fifth - 19% - of all products had no lender arrangement fee in Q1, up from just 11% in Q2 2017.

Some 39% of products have flat fees charged at an average of £1,441.

On the remaining products, lenders charge an arrangement fee based on a percentage of the loan amount, typically 0.5-3%.

David Whittaker, chief executive officer at Mortgages for Business, said: “Change has been the only constant in the buy to let market in recent years so we felt it was time to take a more holistic approach to tracking and analysing industry developments. This new Buy to Let Mortgage Index combines and replaces four previous indices plus our commentary on the money markets.

“Whilst the current picture shows that lenders and landlords have much to accommodate, the data reveals that slowly, both are moving towards solutions which should keep buy to let a popular if less prolific investment in the years to come.”

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Thistle Finance and Mercury FX join forces to cater for expat BTL investors

May 4, 2018

Thistle Finance has teamed up with global currency specialist, Mercury FX, to offer UK expats new buy-to-let rates through specialist loans packager and reduced international transaction costs.

Thistle reports that demand is growing from expats for buy-to-let around the UK, but to help support those investors, the specialist packager wants to reduce transaction expenses by cutting the cost of transferring money back into sterling.

The company reports that Scotland, in particular, is a major growth area for expat buy-to-let, with Skipton International recently launching north of the border to accommodate growing demand.

Similarly, Aldermore has further widened and improved its lending criteria for UK expats keen to let out Scottish property, many of whom work overseas in the oil and gas industries but are keen to remain on the property ladder in Scotland.

Mark Dyason, managing director of Thistle Finance, said: “Demand for UK expat buy-to-let has gone off the scale, and is particularly strong in Scotland due to the arrival and increased appetite of more lenders with significantly improved criteria and rates.

“The knock-on effect of this is that a Scottish expat’s chances of securing buy-to-let finance from overseas have effectively been doubled. In partnering with a currency specialist of the calibre of Mercury FX, we’re now able to offer an end-to-end package for expat borrowers, giving them not just the best rates and advice on their buy-to-let mortgage finance but ensuring they save significant amounts of money when getting funds back into the country.”

Alongside bank-beating exchange rates, Mercury FX claims to typically save its clients up to 4% on transaction fees compared to the average high street bank.

Alastair Constance, CEO, Mercury FX, commented: “There are millions of UK expats dotted around the world and a growing number of them want exposure to UK buy-to-let, as both an income generator and hedge against rising house prices. To do so involves transferring often significant sums of money into sterling but far too many ex-pats continue to transact through the major banks, which charge a considerable premium.

“In partnering with Thistle Finance we can ensure our clients get access not just to great exchange and transaction rates but the very best loan advice from an expert in this field, whether for buy-to-let or any other form of specialist property finance.”

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Letting fee ban will hit tenants hardest, says ARLA Propertymark

May 3, 2018

The ban on letting fees charged by landlords and letting agents is on its way, along with new rules on deposits, with the Tenant Fees Bill introduced into Parliament yesterday.

The government estimates that the Tenants Fees Bill will bring an end to ‘costly’ letting fees and save tenants around £240m a year, according to government figures.

The Bill will also give tenants greater assurances that the deposit they pay at the start of the tenancy cannot exceed six weeks’ rent.

The new Housing and Communities Secretary James Brokenshire said: “This government is determined to build a housing market fit for the future. Tenants across the country should not be stung by unexpected costs.

“That’s why we’re delivering our promise to ban letting fees, alongside other measures to make renting fairer and more transparent.”

A government statement said that the Tenant Fees Bill will stop letting agents from ‘exploiting their position as intermediaries’ between landlords and tenants, and ‘prevent unfair practices’ such as double charging for the same services.

The statement added: ‘It [the Bill] will also help to increase competition between agents and landlords, which could help drive lower costs overall and a higher quality of service for tenants.’

However, ARLA Propertymark has warned that tenants ‘will end up worse off’ and banning fees will ‘not result in a more affordable private rented sector’.

David Cox, chief executive at ARLA Propertymark, commented: “The day we have been expecting since the Chancellor announced the ban on tenant fees in the Autumn Statement 2016 has arrived, with the Tenant Fees Bill beginning its passage through Parliament this afternoon.

“We do not believe the Bill will achieve its aims, as our own research last year demonstrated that tenants will end up worse off and banning fees will not result in a more affordable private rented sector.”

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Buy-to-let nightmare: Landlord may be forced to sell over spiralling costs

May 3, 2018

When ex-social worker and professional landlord Leslie-Ann acquired the 18th century two-bedroom cottage she lives next door to four years ago, she felt it would be a good long-term investment.

The property, located in March, Cambridgeshire, was rent-protected with a tenant already in situ with the cottage occupied by an elderly tenant and neighbour for more than 30 years.

Although Leslie-Ann knew the property was untidy and required some work, she felt that becoming landlord to her neighbour would give her an opportunity to help the tenant get the property back in good order.

However, problems were apparent from the start with Leslie-Ann receiving rent payments intermittently and struggling to gain access to the house even to carry out her basic landlord obligations. 

The situation continued to deteriorate, with rubbish piling up and vermin visible around the property. She reported the situation to Fenland District Council to investigate, who carried out a report which highlighted serious health and safety hazards.

They issued an advisory notice for the landlord to gain access so she could carry out necessary works, and offered the tenant alternative accommodation, but this was refused.

Concerned about her tenant’s mental health, Leslie-Ann also contacted social services, to no avail. The only alternative was to seek a possession order.

Having hired Landlord Action, the eviction specialist managed to gain access to the property. But the tenant responded by filing a defence saying the landlord was harassing her, and the property was in a state of disrepair because Leslie-Ann had not maintained it.

Tragically, the tenant has since passed away and now Leslie-Ann is embroiled in a complicated legal battle which, if she loses, will see her having to pay more than £25,000 in legal fees, as well as an additional £5,000 to remove the tenant’s belongings from her property, which could leave her in financial ruin. 

With her story due to be aired today on Channel 5’s ‘Bad Tenants Rogue Landlords’ at 8pm, the landlord feels the authorities and legal system let both her and her tenant down.

Leslie-Anne said: “This whole situation has been a complete nightmare and now after years of battling the system, I may have to sell the property. I didn’t realise, until it was much too late, the severity of my tenant’s issues. 

“I tried time and time again to explain to the council and social services but they all failed to act quickly enough. 

“Somehow this has now come back on me. I’ve been a landlord for 30 years and never had a problem, and now I’m being vilified as a ‘rogue’ landlord.”

In 27 years working as an eviction specialist, Paul Shamplina, founder of Landlord Action, says that he has never seen a worse case.

He said: “Entering the property with the film-crew was a stomach-churning experience, it was a real-life house of horrors.  From the moment we stepped foot inside, the stench hit you even though we had masks on.

“We couldn’t move more than a couple of feet for overflowing mounds of rubbish, piles of belongings and black sacks full of human faeces – the bathroom had not been used in the proper capacity in over two years!”

“The floorboards had given way and the ceilings were hanging down. I think viewers will be shocked when they see this case.”

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Landlords slapped with hefty fine after ignore planning and licensing laws

May 3, 2018

A buy-to-let landlord in North West London has been ordered to pay more than £10,000 for licensing breaches in connection with an overcrowded property that has also seen an estate agency handed a heavy fine.

Landlord Mohammed Mehdi Ali of Barn Hill, Wembley, has been fined £10,000 for failure to licence a three-storey, semi-detached house in Tower Road, Willesden Green, in addition to court costs totalling £3,300.

Easy Let agency was also fined £20,229 by Willesden Magistrate Court for the rental property, which was split into flats, without the appropriate license.

Ali and Easy Let were in breach of House in Multiple Occupation (HMO) legislation for cramming more than 10 people into the ground and first floor rooms, including three children.

In a separate case heard at Willesden Magistrates last week, landlord Stephen Citron, of Chelmsford Square, Kensal Rise, was ordered to pay £17,273 in fines and court costs for failing to comply with licensing regulations.

Citron was renting out undersized bedrooms to tenants in a house in Keslake Road, Kensal Rise, also in North West London.

The two-storey property contained five standard size bedrooms and two undersized rooms, which were prohibited for use under the licence conditions.

The legal minimum requirement for a single room is 6.5sqm. Citron’s undersized rooms measured 5.1sqm and 4.8sqm respectively. He had ignored repeated warnings to make adjustments to his property in order to comply with legal requirements.

Spencer Randolph, head of private housing services, said: “Ownership of a property does not give landlords the right to ignore planning and licensing laws. Mr Citron and Mr Ali were given every opportunity to comply with regulations, but instead they held the Council in contempt and ended up in court.

“If they had cooperated with us, they would have been spared the hefty financial blows and criminal records they were dealt in court.”

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Lamond Capital expands rental management business in Birmingham

May 3, 2018

Lamond Capital has acquired a major Birmingham residential letting portfolio from national property services business SDL Group.

SDL Property Management has decided to dispose of the stock as part of is wider business strategy, with the firm now focusing on large scale institutional landlords particularly in the build-to-rent sector.

“This Birmingham-based residential lettings portfolio is a great fit for John Shepherd Lettings, Lomond Capital’s local lettings agency, and the sale creates a larger rental management business in the city, ready to serve the region’s landlords and property investors,” said Rob Clifford, group commercial director at SDL.

Clifford described the new deal as a “very positive move” as the company focuses its strategy to “revolutionise the experience of tenants” through large scale PRS projects.

He added: “This is a key component of our work to innovate across the property industry, which has also seen the launch of SDL Property Partners and SDL Auction Partners in the past 12 months.”

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Landlords face hefty fines for not providing ‘How to Rent’ guide to tenants

May 2, 2018

A number of buy-to-let landlords who failed to provide tenants with a copy of a ‘How to Rent’ guide – a checklist for renting in England, now face the prospect of unnecessary and costly legal battles when trying to evict tenants.

The warning comes from law firm Furley Page, who says many landlords are failing to comply with new rules governing Section 21 Notices introduced on 1 October 2015.

If a landlord gives a new tenancy or a replacement tenancy from October 1st 2015 onwards, they need to comply with the prescribed information requirements for the new Section 21 form.

As part of this, landlords must provide at the outset of the original tenancy an up to date version of the How to rent: A checklist for renting in England booklet, which you can download by clicking here.

You can either provide renters with a printed copy, or send a digital version of the pamphlet by email.

Sarah Woolnough, a chartered legal executive at Furley Page, explained: “Many landlords are failing to comply with the requirements of the new rules simply because they are not providing tenants with the correct information at the right time. 

“For example, any landlord that fails to provide tenants with a copy of the Government's How to Rent leaflet are now in breach of the regulations, meaning they can't issue a Section 21 Notice to reclaim possession of their property.

“Thousands of landlords are incurring sizeable and unnecessary legal expenses when tenants challenge their eviction notice through the courts.”

Aside from provide the latest version of the government's How to Rent leaflet, it is important that, under the existing rules, landlords also provide tenants with an Energy Performance Certificate for the property and the current gas safe certificate (if the property has gas supplied). Failure to comply with the requirements means a landlord is unable to issue a Section 21 Notice to take possession of the property.

Woolnough added: “If landlords have not carried out all of the requirements, they are barred from serving a Section 21 Notice under the new rules. This means that unless their tenant is in breach of the terms of the tenancy, the landlord will not be able to evict the tenant and take back possession of their property. 

“After a Section 21 has expired, it is too late for the requirements to be remedied, and the landlord must either start the termination process again, which can take many months, or take their chances in Court.

“My advice to landlords is always to ensure that all the requirements have been met prior to serving a Section 21, and to retain proof in the event of a legal challenge by the tenant.”

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Number of BTL mortgage products hits record high

May 2, 2018

Buy-to-let investors now have plenty of choice when looking for a mortgage after new data revealed that the number of buy-to-let products currently on the market has reached an all-time high.

The data, taken from the latest Moneyfacts report, shows that the number of buy-to-let (BTL) products has increased by 29.8% in the past year to total more than 2,022,, up from 1,558 a year ago.

The table below highlights how much the market has improved in the last year alone, despite the current phasing out of mortgage interest relief.

Two Years Ago

One Year Ago

Six Months Ago

Today

Number of BTL Mortgage Products

1340

1558

1820

2022

Source: moneyfacts.co.uk 

Charlotte Nelson, finance expert at moneyfacts.co.uk, said: “The BTL market has seen quite a rollercoaster ride over the past year, including multiple changes that have required both landlords and providers to rethink their options. However, this hasn’t appeared to deter providers, marking an increase of 464 deals in just one year, which has seen the BTL market break yet another record and rise past the 2,000 mark for the first time on moneyfacts.co.uk’s records.”

The Prudential Regulation Authority (PRA) rules launched at the end of September 2017, which saw lenders having to apply stricter standards to those with four or more properties, could explain the boost to product numbers, according to Nelson. 

She explained that providers may well have opted to offer two different products to cater to the different borrower types.
 
Separate data from moneyfacts.co.uk shows that the number of limited company fixed rate options have also increased. 

“These extra products, which cater for landlords looking to reassess their options after the tax changes, are yet another reason why the overall product numbers have been boosted,” Nelson added. 

She continued: “Amid this upheaval, the market has seen many landlords and aspiring landlords take a step back to assess their options and figure out whether they are making the right choice. As a result, BTL providers are now competing for a smaller pool of customers. Offering variety in their range is one way in which they can compete.
 
“While it has been a tough time for the BTL market, the fact that the number of available deals is still growing shows it is still a viable option. However, any borrowers considering becoming a BTL landlord should seek the advice of a financial adviser, to ensure this is the right choice for them.”

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New Home Secretary urged to address concerns about Right to Rent

May 2, 2018

There is growing speculation that the new Home Secretary Sajid Javid is paving the way to become the next Prime Minister. But before he does that, he needs to first address the Right to Rent scheme and the adverse impact it is having on many would-be and vulnerable tenants, according to the National Landlords Association (NLA).

In a letter of congratulations to Javid following his appointment as Home Secretary, the NLA used the opportunity to press the former Minister for Housing, Communities and Local Government to take this opportunity to review the controversial Right to Rent scheme.

Richard Lambert, CEO of the NLA, commented: “In his time as Housing and Communities Secretary, Sajid Javid worked with the NLA to support the private rented sector (PRS).

“We have reminded Mr Javid of the effects the Right to Rent scheme has had on would-be and vulnerable tenants, its excessive checks and lack of monitoring, and the additional cost it is placing on an already pressurised sector.

“There is now an opportunity for us to work with Mr Javid, and with new Housing Secretary James Brokenshire, to look again and come up with a more practical, workable system than the one we have.”

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Existing system for redress in housing is ‘ineffective, confusing and complicated’

May 2, 2018

Almost seven in 10 people find the current system for complaining about housing confusing, according to the results of Ombudsman Services' major dialogue, Building Balance, which sought views from more than 400 renters, tenants, homeowners and people working in the sector responded.

Ombudsman Services (OS), which has been gathering opinions on how complaints in the housing sector should be handled, said the responses “overwhelmingly indicated a need for change”, with 84% of people surveyed supporting the idea of creating a single housing ombudsman.

Some 69% of respondents find the system for complaining confusing, with more than half - 55% - not knowing where to go to complain about housing and property.

The study found that common issues faced by consumers included those with new-build properties, maintenance and upkeep, lettings and estate agencies, as well as problems with unauthorised parking, gas leaks, asbestos and dangerous electrics.

Chief Ombudsman Lewis Shand Smith commented: “Our Building Balance dialogue has given us a clear remit to call for change. The current system for redress in housing is ineffective, confusing and complicated, and clearly doesn’t provide the service that consumers need.”

The full report, Building Balance: Restoring power to consumers in the housing sector, has been submitted as part of a comprehensive White Paper in response to the government’s Strengthening consumer redress in housing consultation.

It makes several recommendations to the government including:

+ The Ministry of Housing, Communities and Local Government should put consumers at the heart of the sector, offering a simple complaints journey, strong regulation and easy access to help and advice for consumers.

+ The creation of a single ombudsman for housing (supported by the vast majority - 84 per cent - of Building Balance respondents) that is underpinned by statute.

+ The introduction of consistent standards that firms operating in the housing sector must comply with when handling complaints to provide clarity for consumers.

Smith added: “The recommendations put forward in our report are underpinned by real insights, as well as the experience we have gathered during our ten years of helping consumers with complaints in the housing sector. For example, the dialogue showed overwhelming support for the creation of a single ombudsman.”

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Accord lowers rates on BTL remortgages

May 2, 2018

Accord Buy To Let has reduced rates on two and five-year fixed-rate remortgage products by up to 0.18%.

Accord, which is part of Yorkshire Building Society, is also offering landlords taking out any of their deals an additional £250 cashback on selected mortgages.

Accord’s two-year fixed rate deals start at 2.12% at up to 75% loan-to-value (LTV) which has free standard valuation, while its five-year deal is available at 2.66% up to 65% LTV with free standard valuation and free legal fees. Both deals include a £950 fee plus £750 cashback on completion.

The remortgage market has performed well in 2018 so far, as many landlords look to re-finance their portfolios following the second round of tax relief reductions, according to Chris Maggs, commercial manager at Accord Buy To Let.

He said: “Our latest range of products aims to provide landlords with a helping hand when managing their portfolios. We hope the additional £250 cashback boost, on mortgages with no cashback as well as some that already had £500 cashback, will help minimise the upfront costs of remortgaging a property.

“We constantly review our mortgages to offer the best fit for landlords, and we hope this combination of benefits will really appeal to brokers and their clients looking for the best option to suit their individual buy-to-let requirements.”

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Sharp rise in Airbnb listings in London

May 1, 2018

London now has significantly more Airbnb listings than ever before, with a growing number of buy-to-let landlords turning to the holiday letting website to list their properties to let.

Despite the 90-day cap on listings, Airbnb is helping thousands of landlords secure rentals every week, prompting concern among some Londoners that an epidemic of bookings is changing the character of some popular neighbourhoods in the capital.

London has seen the biggest jump in the number of individuals advertising property on Airbnb, with a 43% rise in the volume of multi-listings on Airbnb recorded in the last 12 months, according to Portico.

The company, which launched an Airbnb interior styling service last year, as part of their premium Airbnb management package, reports that while there are some definite trends around where Airbnb is already a success, including Kensington and Chelsea and Tower Hamlets, there are also some surprising up-and-coming hotspots.

The highest growth in booked listings was recorded in Sutton which saw a 183% increase in booked listings year-on-year, up from an almost non-existent presence on Airbnb in 2016. They currently have 151 active rentals, with the second cheapest average daily rate in London, at £71.

Other areas in which the number of booked properties rose over 60% in the last year include Hillingdon, Enfield, Barking and Dagenham and Redbridge, all areas from which central London is easily commutable.

Mark Lawrinson, regional director at Portico, said: “Airbnb has become a way of life for most Londoners and isn’t confined to those that are property professionals or landlords. Although it is a great option for landlords to maximise income during void periods, it is also a fantastic way to make additional income out of your property at points you don’t need it, such as work trips away, holidays or just the odd weekend.

“We have seen great take-up on Portico Host, our full Airbnb management service where we take care of everything from the initial rental valuation to the preparation of the property. This is an attractive prospect for Airbnb hosts as the on hand management team take care of everything, and just deliver the pay-packet at the end of the month.”

 

Borough

Booked listings March 2018 (entire properties only)

Booked listings March 2017 (entire properties only)

Booked listings March 2016 (entire properties only)

Difference 2017 - 2018

Difference 2016 - 2018

Sutton

34

12

7

283%

486%

Bromley

111

42

38

264%

292%

Hillingdon

62

30

24

207%

258%

Kingston Upon Thames

88

52

36

169%

244%

Enfield

64

38

33

168%

194%

Barking and Dagenham

23

14

5

164%

460%

Barnet

222

136

96

163%

231%

Ealing

261

161

116

162%

225%

Croydon

154

95

52

162%

296%

Greenwich

299

186

159

161%

188%

Redbridge

69

43

28

160%

246%

City of London

287

179

164

160%

175%

Newham

418

263

177

159%

236%

Brent

488

309

270

158%

181%

Tower Hamlets

2263

1507

1114

150%

203%

Bexley

15

10

8

150%

188%

Lewisham

327

221

176

148%

186%

Kensington and Chelsea

2629

1790

1278

147%

206%

Merton

155

108

69

144%

225%

LONDON

22482

15673

11815

143%

190%

Lambeth

1129

794

625

142%

181%

Wandsworth

843

594

449

142%

188%

Westminster

4030

2840

2029

142%

199%

Camden

2103

1502

1134

140%

185%

Richmond Upon Thames

265

192

133

138%

199%

Southwark

1315

954

695

138%

189%

Hammersmith and Fulham

1229

902

620

136%

198%

Islington

1411

1055

883

134%

160%

Hackney

1356

1018

928

133%

146%

Waltham Forest

203

159

94

128%

216%

Haringey

301

236

193

128%

156%

Hounslow

161

133

85

121%

189%

Harrow

68

61

25

111%

272%

Havering

17

16

5

106%

340%

 

AirDNA data taken in April 2018.

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Councillor in charge of punishing rogue landlords failed to declare rental property

May 1, 2018

A Labour councillor tasked with clamping down on rogue landlords has found herself in hot water after failing to declare a rental property owned by her husband.

Cllr Laila Butt, Barking and Dagenham Council’s cabinet member for enforcement and community safety, is under investigation by her own council after failing to list the property owned by her husband, Shahid Hussain Butt, on her register of interests, in accordance with the law.

The property, located in Barking, also fails to appear on a compulsory private landlord register which is a breach of council requirements.

Tamkeen Shaikh, chairwoman of Barking Conservatives, has called on council leader Darren Rodwell to suspend Cllr Butt from the Labour Party and sack her as a councillor in the Abbey ward.

She wrote in a letter to Cllr Rodwell: “I’m sure that honest Labour members would be appalled to learn that a person with, at best such a negligent attitude to their responsibilities, should be promoted by their party.”

In a joint statement from the Barking and Dagenham Labour group and council, a spokesman said: “We take very seriously the allegation that has been made about Cllr Butt, which we were made aware of on April 20.

“We immediately referred the matter to the council’s monitoring officer and asked for an investigation to be carried out.

“Cllr Butt is in complete agreement with this and is cooperating in full.

“It is right that an independent process is followed. For this reason, we are not able to add anything further until the investigation has been completed.”

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Landlord fined for forcing tenants to live in ‘uninhabitable and unsafe conditions’

May 1, 2018

A buy-to-let landlord in Nottinghamshire has been ordered to pay almost £6,500 after failing to comply with an improvement relating to an investment property she owns.

Susan Elizabeth Jubb, 55, appeared at Mansfield County Court, where she accepted that she ‘forced’ her tenants to live in substandard conditions by pleading guilty to the charges against her. 

The rented property in Worksop was found to have 17 areas of major concerns, including electrical faults, no fire alarms and insecure windows.

In addition, inspectors discovered fire damage to the rear of the building, no adequate fire escapes, concerns over the security of the property after the front door, inadequate internal doors, missing floorboards, loose carpets on a steep staircase and concerns over the heating system and insulation of the property.

Jubb should have completed the work by October 27, 2016 but officers were denied entry to the property to make further inspections and were only able to fully inspect the property almost a year later, in early October, 2017.

The property has been shut down with a closure order imposed by Nottinghamshire Police after anti-social behaviour there, while the landlord, of Ely Close in Worksop, is required to stump up a fine of £2,666, as well as paying the council’s legal costs of £3,519.37 and a victim surcharge of £266 - totalling £6,451.37.

The rental property is now the subject of a prohibition order which means that the landlord cannot allow anyone to live there until all of the work has been completed to the satisfaction of housing officers.

Cllr Julie Leigh, member for neighbourhoods at Bassetlaw District Council, said: "We welcome the court’s decision and a significant fine is justified after Jubb had taken advantage of a tenant and forced them to live in uninhabitable and unsafe conditions.

“Thanks to the council’s prohibition order, Jubb must also bring her property up to the necessary standard before she will be allowed to rent out the property or allow anyone to live in the property.

"We hope that this serves as a warning to other landlords whose properties are not up to the required standard or pose a danger to their tenants.”

 

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A guide to property tax for non-residential landlords

May 1, 2018

Many buy-to-let landlords in the UK are often overwhelmed with confusion and fear whenever discussing or thinking about tax, as it can sometimes be difficult to know exactly what, how and when you need to pay. However, as an overseas investor and non-residential landlord in the UK, the situation is typically much more confusing.

Overseas investors may have even less knowledge about different tax policies in the UK, and may be unaware of what is required of them. With this in mind, we have put together a guide to help non-residential landlords to be more aware of UK property tax, and to help you understand more about your own tax responsibilities as an overseas investor in the UK.

Non-resident landlords

A non-resident landlord is somebody that is not a resident of the UK, but owns UK property and receives rental income from that property over an agreed amount of time. A non-resident landlord, you should complete an NRL1 form which, once filed with the UK tax authorities, will ensure that your rental income is not subject to tax at source.

However, completion of this form does not mean that you are exempt from tax on your rental income, and this is a common misconception amongst new non-residential landlords. As well as this, many overseas investors believe that once they have registered to be considered as a non-resident landlord that they are no longer required to file annual tax returns – this is once again incorrect. You are indeed required to file your annual UK income tax return, and if you fail to do so, you will be met with significant penalties, as well as being demanded to pay the tax that you owe.

Tax for overseas investors

Almost nobody is exempt from UK income tax on the money that they generate through rental income, and so even as an overseas investor, you are subject to tax charges on your investment. As a non-resident landlord, tax charges include but are not limited to:

Income Tax – Applicable to certain sources of income, such as rental income, you are required to pay income tax for your UK property.

Inheritance Tax – Due on assets based within the UK that are held directly, as well as most types of UK residential property, even when held indirectly.

Stamp Duty Land Tax – Applied upon the purchase of your UK property, the rate at which you are charged is dependent on the price of your property.

Capital Gains Tax – This is payable against the profit that you make when selling your property, applying to most types of UK residential property, and it is expected to be extended to all UK property as of 1st April 2019.

If you employ the services of a letting agent, of who acts upon your behalf by collecting rent and paying the rent over to you, they are required to withhold 20% of the money, in order to pay it to HMRC. This 20% fee is for the income tax that you are liable for, and this process can only be change with the completion of the NRL1 form. Once the form is completed, both you and the agent will receive written confirmation from HMRC, outlining that the agent is no longer required to withhold any funds to be paid as income tax.

Tax charges for the sale of your property

Firstly, as a landlord, you will have a Principle Private Residence (PPR), of which is your main home. If you have more than one home, there are a number of rules that help to determine which property is your PPR, however nobody can have more than one PPR. Any profit that you make from the sale of your PPR is not subject to tax charges; however any profits made on other properties are indeed subject to tax charges.

Residents of the UK are required to pay Capital Gains Tax on any profit that they generate from the sale of their property regardless. However, non-resident landlords currently only have to pay Capital Gains Tax on the profit that they generate from the sale of most types of UK residential property.

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

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James Brokenshire named as new housing secretary

May 1, 2018

James Brokenshire has replaced Sajid Javid as housing secretary, following Javid's move to home secretary in the wake of Amber Rudd’s resignation.

Brokenshire was Northern Ireland secretary until he resigned in January because he was receiving medical treatment to remove a tumour on his lung. But the operation was successful and he has been recovering well.

Following his appointment, Brokenshire tweeted: “Honoured to have been asked by the Prime Minister to serve as Secretary of State at the Ministry of Housing Communities & Local Government. Looking forward to taking the government’s agenda forward especially on building the homes our country needs.”

Mark Hayward, chief executive of NAEA Propertymark, and David Cox, chief executive of ARLA Propertymark, are among those to welcome James Brokenshire’s appointment to Housing Secretary.

In a joint statement, the pair said: “We welcome James Brokenshire into his new role as housing secretary, following Sajid Javid’s move to home secretary.

“Over the last 12 months, housing has been high on the political agenda, with Sajid Javid and his team working closely with the industry to make qualifications for property professionals compulsory, and ultimately make the process of buying, selling, renting or leasing a property better for consumers.

“We look forward to meeting the new minister and working with him and his team over the coming months and hope the department’s position and policy focus stays on track.”

Dominic Raab remains in his position as housing minster.

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As Scottish rents edge higher, BTL investors achieve ‘competitive’ returns

April 30, 2018

Buy-to-let landlords in Scotland continue to achieve higher returns on their property investments than their counterparts south of the border, the latest Scotland Buy to Let Index from Your Move shows.

The average Scottish rental price hit £570 a month in March, which is up 0.2% month-on-month.

According to Your Move, landlords in Scotland continue to achieve a 4.7% yield on average on their properties – a higher return than the average yield of 4.4% in England and Wales.

Only landlords with properties located in the North East and North West regions of England enjoyed higher or equal returns than those in Scotland.

Brian Moran, lettings director at Your Move Scotland, said: “It has been solid and reliable for the Scottish rental market in the last 12 months, but this will appeal to investors in a world where so many other asset classes are proving volatile.

“The returns delivered to landlords remain very competitive, especially when compared to those in England and Wales.

“This stable outlook will encourage landlords to invest again in the market, as well as in the properties they already own.”

There continues to be a disparity in prices in the different regions of Scotland, with the Edinburgh and Lothians recording the highest rents at £668 a month. The East of Scotland has the cheapest rents at £533 per month.

The Glasgow and Clyde area also saw rises in average rent levels, with the typical property now let for £584 a month following a 3% price increase in the last year.

Landlords north of the border will be pleased to learn that arrears levels have stabilised, suggesting that the market has found a good equilibrium for both tenants and landlords.

On an absolute basis, the number of households in serious arrears - defined as two months or more - was 8,217 during March.

Landlords in Scotland are being reminded about new rules which affect the way letting agencies are able to conduct business on their behalf.

Moran added: “With the Letting Agent Code of Practice introduced in January, landlords should get in touch with their current agent to check whether they are compliant with the new legislation taking effect.”

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Number of houses sold for less than asking price hit record high in March

April 30, 2018

It currently looks like a potentially good time for buy-to-let landlords to expand their property portfolios, amid an overall cooling in the housing market.

Fresh data from the National Association of Estate Agents (NAEA) shows that 86% of properties sold for less than the asking price – the highest level seen since records began in 2013.

This is an increase of 12% from the previous month when 74% of sellers accepted offers below their original asking price.

The figures also reveal that just 10% of properties sold for the original asking price in March, which is the lowest level since records began.

The NAEA also report that there were slightly fewer house-hunters on estate agents’ books last month, with 309 registered per branch, down from 308 in February, suggesting that there is less competition from buyers.

In fact, Year-on-year, demand for housing is down by 22%, as agents registered 397 house-hunters per branch in March 2017 and 417 in 2016.

The number of properties available to buy increased to the highest level for five months with 40 available per branch in March compared with 35 in February.

Mark Hayward, chief executive at NAEA Propertymark, commented: “Earlier this month, Zoopla research showed that on average, houses are being sold for almost £25,000 less than asking price, which our findings echo.

“A record number of properties sold for less than asking price in March, indicating that buyers have shifted into the power seat. This is music to house-hunters’ ears.”

Although demand has cooled off in recent month, Hayward expects to see activity levels increase again as those holding off on making purchases move to take advantage of these lower prices.

He added: “Ultimately, this means the number of offers accepted below asking price will fall again and the market will swing back in the favour of homeowners.

“The only thing which will offer a long term solution is more homes to balance the issue of supply and demand.”

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Fewer lenders for portfolio landlords to choose from

April 30, 2018

Almost half of portfolio landlords who had submitted a mortgage application since the introduction of the new rules reported a reduction in the number of lenders available to choose from, according to fresh research.

Paragon’s PRS Trends research found that 46% of portfolio landlords found a change of lender choice, which contrasts with 33% of non-portfolio landlords.

PRA rules introduced at the end of September 2017 are having an adverse impact on the buy-to-let mortgage market according the research, based on interviews with 203 experienced landlords in Q1 2018.

Almost all landlords reported an increase in documentation requirements across the market, with 80% saying requirements had increased and 70% saying they had increased a lot.

Similarly, 80% of all landlords noticed an increase in lenders’ mortgage processing times. However, more than half - 54% - of landlords with larger portfolios said that processing times had increased by a lot compared with just 33% of smaller scale landlords.

Some 30% of BTL landlords said loan-to-value ratios on offer were also lower than before.

John Heron, managing director of Mortgages at Paragon, commented: “The more detailed underwriting required on larger portfolios makes it more difficult for mainstream mortgage lenders to compete successfully for the full spectrum of professional landlord business.

“As a result, we’re seeing a polarisation in the market, with specialist lenders playing to their strengths, adding product features that enhance value for larger scale landlords and increasing their share of more complex, portfolio business.”

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Landlord looks to bridging loan firm to expand portfolio

April 30, 2018

With many landlords finding harder to secure a mortgage since the Prudential Regulation Authority’s changes were introduced last year, some buy-to-let investors are turning to alternative finance providers to secure funds.

Bridging finance, for instance, known for its speed, offers much faster time to completion than high-street lenders, which is mainly why this form of short-term finance is growing more popular.

The speed at which bridging finance can be implemented is the main reason for its use. Unlike mainstream mortgage lenders which have been reluctant to increase their short-term and commercial lending after the last recession, a bridging lender provides a real time solution to any potential funding gap by making available the required funding a purchaser needs to acquire property in as little as 24 hours. 

Specialist lender Together teamed up with commercial brokerage B2B Financial earlier this month to provide £46,618 to a Walsall-based property investor, enabling him to acquire a plot of land - by re-financing a buy-to-let flat he owns.

The investor plans to build a new buy-to-let property on the land, valued at £50,000, but faced a deadline to exchange contracts on its purchase – so he needed the finance in place quickly to fund his latest venture.

The landlord borrowed the money, against the unencumbered buy-to-let property he had owned for a number of years at 75% loan-to-value. This worked out cheaper than the customer taking out a commercial development loan, which would have proved unaffordable in his circumstances.

Richard Tugwell, group intermediary relationship director at Together, said: “This case just shows how thinking outside the box by trusted brokers and lenders can really deliver for customers.

“The property the customer wanted to borrow against is a well-kept two-bedroom flat worth £70,000 on the open market, so the equity was there in this existing buy-to-let property.

“Now he has the money in place, as well as planning permission to build on the land, he’ll be able to press ahead with his new build property.”

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Renters face rent hikes amid tax changes

April 27, 2018

Almost a quarter of tenants experienced rent hikes in March as landlords are left with little alternative but to pass higher tax costs onto tenants by increasing rents.

According to ARLA Propertymark’s Private Rented Sector Report for March, 23% of tenants saw their rents increase last month, which is the highest level seen since September 2017 when 27% of landlords put rent costs up for tenants.

However, this level is down 25% year-on-year. 

Some 66 prospective tenants were registered per member branch in March, up 8% compared the previous month. This comes after an increase in January which saw the number of tenants registered per branch jump to 70.2.

But while more people are actively looking to rent, the supply of rental stock is failing to keep pace with increasing demand.

The number of rental properties letting agents managed increased marginally in March, from 175 in February, to 179 per branch. This is down from an average of 183 in March last year.

The supply-demand imbalance in the rental market is also placing upward pressure rents.

The data for March suggests its “business as usual” for the private rented sector, according to David Cox, ARLA Propertymark’s chief executive, but he believes that “this isn’t necessarily a good thing”.

He commented: “Supply is still too low and almost a quarter of tenants are experiencing rent hikes every month as landlords try to recoup the costs lost trying to keep on top of all the recent legislative changes – including the recent energy efficiency deadline.

“For the last two decades, successive governments have passed significant amounts of complex legislation for landlords, none of which have been properly policed or adequately enforced – but most of which cost decent landlords a lot of money.

“This is why we’re so supportive of the government’s proposals to crack down on rogue agents, and more recently, plans to confiscate properties from criminal landlords.

“The announcements mark a sensible shift towards focusing on the root cause of the issues affecting the sector, rather than trying to find solutions to individual problems. This, coupled with greater rental stock is the key to fixing Britain’s broken rental sector.”

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Rise in demand for buy-to-let mortgages

April 27, 2018

There has been a sharp rise in demand for buy-to-let mortgages after a number of two-year fixed deals came to end.

A number of landlords obtained mortgages in March 2016, looking to avoid the 3% stamp duty surcharge being introduced for new buy-to-let and second home acquisitions a month later.

Many buy-to-let landlords with two-year deals that recently ended have switched to other deals by refinancing, rather than allow themselves to automatically be transferred on to the standard variable rate set by their lenders, which tends to be significantly more expensive.

Remortgaging has contributed to the hike in buy-to-let deals secured in recent weeks.

“As far as buy-to-let mortgages go, there has been significantly more demand than at this point last year with a raft of two-year fixed deals reaching maturity following the stamp duty rush of 2016,” said John Goodall, CEO of buy-to-let specialist Landbay. 

Despite the pick-up in buy-to-let mortgage lending, overall mortgage activity in March was down 2.3% on last year, industry figures showed yesterday.

Banks approved 37,567 mortgages for residential property purchases last month, down from 38,035 in February and 10% less than in March 2017, according to UK Finance.

Eric Leenders, managing director for personal finance at UK Finance, commented: “There was a rising trend in mortgage approvals for the first three months of 2018 although the number is slightly lower than the same period in 2017.”

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London housing shortage a ‘ticking time bomb’ for businesses

April 27, 2018

The growing housing crisis in London is forcing employees to quit their jobs and making it harder for firms to recruit staff, according to a new survey by the Confederation of British Industry (CBI) and CBRE.

More than a quarter - 28% - of the 176 leading companies in the capital who responded said employees are actually leaving their jobs because they cannot afford to live in the local area.

Some 66% of firms said that housing costs and availability are having a negative impact on the recruitment of entry-level staff. This is up from 57% in September 2015.

The study also found that a lack of housing is also hampering businesses’ ability to offer flexible working, with over a third - 36% - of businesses surveyed finding it hard to do so.

“This survey speaks loud and clear – London’s housing shortage is a ticking time bomb,” said Eddie Curzon, CBI London director.

He supports the Mayor of London’s aim to build 66,000 new homes a year, but says that he wants to see more clarity on how he will work with local authorities to crucially unlock supply in every borough.

Reflecting on the research, Adam J. Hetherington, CBRE managing director, London, said: “Continued growth is vital for London, which remains one of the most sought-after cities for investment. The Government must take heed of the key issues such as housing, business rates and infrastructure which are impeding businesses ability for future growth.”

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BTL landlords urged to ‘embrace’ tax changes and ‘watch their portfolio thrive’

April 27, 2018

A combination of tax reform and stricter regulation for landlords is slowing the growth of the private rented sector (PRS), but private landlords are being encouraged to accept the changes and focus on long-term gains. 

Despite a challenging time for the buy-to-let market, characterised by tax and regulatory changes, investment in buy-to-let continues to outperform most major asset classes, and property investors must not lose sight of that fact, according to Spicerhaart’s operations director Paul Sloan.

He said: “No-one said being a private landlord was an easy way to make money – tax changes and moving legislative goalposts are keeping landlords on their toes.

“However, individuals looking to make longer-term investments are finding limited choices are available to them – interest on savings continues at historically low levels, and the volatility of the stock market provides uncertainty in both the short-and longer-term.”

Sloan points out that the private rented sector is a growing market, and both past performance and the key economic indicators are all positive.

The letting expert has compiled five reasons why he believes that landlords should embrace change, and watch their portfolio thrive:

+ Rising energy standards can help increase property values

On 1st April new Minimum Energy Efficiency Standards regulations went live.  This new requirement is aimed at raising energy efficiency in the private rented sector.  Before a new tenancy can be granted, landlords must ensure their properties adhere to minimum energy efficiency ratings.  Properties must have a minimum rating of E, which means that a new tenancy cannot be granted if the SAP point score is 38 or lower.

However, homes which are more energy efficient will be more attractive to tenants, and any improvements which need to be made to comply are only likely to add capital value.

+ Regulation drives up standards

The Department of Housing, Communities and Local Government announced the introduction of a so-called ‘Rogue Landlord Database’ in a bid to expel landlords who fail to comply with regulation or who rent out substandard accommodation.  This is a move to be welcomed as we believe all tenants should have the right to live in safe, comfortable homes.  So-called ‘Rogue Landlords’ give our industry a bad name and as we continue to provide homes for an increasing population of tenants, the service we provide should be respected and valued.

+ Property values are rising

As a long-term investment, property remains attractive. Recently released figures from the Office for National Statistics showed that average property values in the UK increased 4.4% versus March last year.  In real terms this is growth of £9,000 – or the equivalent of £750 each month.

The majority of landlords are making a modest profit from rental income on a monthly basis – and when combined with a continued rise in average property values this is positive return.

+ Rents remain in line with earnings

According to the latest Rental Index from HomeLet, rents are continuing to rise across the UK at 0.9% - which is far lower than the growth in average weekly earnings, at 2.8%.  For tenants this will mean their monthly rental payments will be feeling more affordable in real terms.  The good news for landlords is that if tenants are less likely to struggle to meet their monthly rental commitments there is a reduced risk of arrears - and of course, happy tenants will often stay in their home for longer.

+ Private rented housing is in demand

The UK continues to have a shortage in the provision of social and council-owned homes, and the upfront cost of home ownership remains prohibitively high for many.  Private landlords are now providing homes to over 20% of UK households – a number only set to grow over the coming years, with some predictions that private rented homes will account for approximately 25% of all households by 2021.

With landlords enjoying a combination of portfolio growth, rental price growth and growth in the value of their properties, the overall experience for many remains positive.  Reduced tax relief and tightening legislation haven’t deterred smart landlords from carefully strengthening their portfolio, to match the increased demand.

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LandInvest cuts BTL mortgage rates

April 27, 2018

LendInvest has reduced rates on a number of its buy-to-let mortgage deals.

The specialist lender has introduced a two-year fixed rate at 2.99% up to 75% loan-to-value (LTV), while buy-to-let investors with a 20% deposit can access a two-year fix at a borrowing rate of 3.69%.

These rates are available to portfolio landlords, limited companies and individuals for a limited time only.

LendInvest has also reduced the valuation fee on remortgages up to £300,000 to just £100, provided the property is valued at less than £500,000.

For a limited period the lender is also offering free title insurance on these remortgages.

Ian Boden, sales director at LendInvest, commented: “In the five months since launch, our buy-to-let product has gained impressive momentum, allowing us to step back and regularly evaluate our product offering.

“At LendInvest we are constantly listening to the brokers we work with and re-assessing how we can adapt and evolve our proposition to best suit our borrowers. These changes are not only huge cost saving initiatives, but also dramatically cut down the time taken to deliver our loans.”

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Average UK rents fall for first time in six years

April 26, 2018

Average UK rents have fallen for the first time in six years, fresh data shows.

The slowdown in the rental sector reflects a sluggish sales market, in which property prices are falling

The average monthly rent on a new tenancy that started in the first quarter of the year was £772 a month, which was down 0.54% on the last quarter of 2017, according to the latest rent index from the Deposit Protection Service (DPS)

The tenancy deposit protection scheme says that if the existing downward trend is maintained in Q2 2018, the UK will almost certainly experience its first annual rental decrease since Q4 2009.

Northern Ireland experienced the biggest percentage fall of any UK region at 3.14%, from £544 a month to £527 a month, replacing the North East as the most affordable UK region in which to rent property.

Julian Foster, managing director at The DPS, said: “The decrease in average rents across the UK could represent the beginning of a substantial development for the housing sector and a significant indicator for understanding the wider economy.

“Rent growth began to slow in summer 2016, and the slip into negative figures suggests that there is a genuine long-term issue affecting the private rented sector.

“The UK-wide decrease implies that there is more at play than a short-term or local correction to excessive prices, and a similar reduction in Q2 could represent the first annual decrease in rents since 2009.”

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Bidding war for properties to rent

April 26, 2018

With demand from tenants gathering pace, at a time when there has been a reduction in the number of new properties for renting, many prospective tenants now face having to bid against each other, pushing rents up in the process, in the latest sign of Britain’s overheated property market.

Various reports suggest that a growing number of letting agents are now turning to open days and ‘sealed bids’ to achieve record rent levels.

The supply-demand imbalance is placing upward pressure on rental values, according to JLL Residential.  

The company says that it has seen a 57% increase in applicant registrations and 40% rise in offers made from those looking to rent.

Activity has picked up significantly with competitive bidding now taking place on a number of properties, and rental prices being achieved on some new build developments, for example, reaching 5-10% higher than anticipated.

Lucy Morton, head of residential agency at JLL, said: “It has been an exceptionally busy few months for the lettings teams across all the JLL agency offices, and well-presented properties have let with fewer voids than in recent years.

“The quality of rental stock has increased considerably, with renting no longer considered the second option but the preferred option for many.

“Punitive changes to stamp duty have shaped how people are interacting with the property market, most notably at the higher end. Once upon a time, if you were looking to live in London for two-three years you would automatically look to buy, but now with the cost of stamp duty, along with more stable price growth, you are likely to only break even in this time given the cost of buying a home.”

She added: “An unspoken perk of renting is the ability to ‘Right-Size’, which is an exclusive benefit of renting as opposed to buying.

“Tenants have more flexibility around where and the type of property they rent, so if the ‘shoe doesn’t fit’ you can move easily, allowing young professionals to upsize when they become a young family, or families to downsize when the children leave the nest.”

 

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BTL landlords prepared to pay more to avoid the voids

April 26, 2018

No landlord wants to experience excessive or lengthy void periods as that can significantly impact the viability of their investment, and that is why many astute buy-to-let investors are willing to invest if it means securing a quicker let.

Void periods are one of the most pressing concerns for buy-to-let landlords. Costs can start to mount when a property remains vacant. Consequently, rather than seeking immediate cost savings in the wake of recent tax changes, savvy landlords are, in fact, happy to pay more to reduce the length of time a property remains vacant, according to Upad.

The company introduced ‘featured listings’ last year at a extra cost of £150, including the option to list properties on Rightmove, and the online letting agent reports that the response from landlords has been positive, partly because many recognise that  listing property on a leading portal, like Rightmove, can help boost the number of enquiries per property and, in doing so, secure a tenant sooner.

James Davis, Founder and CEO of Upad, said: “Our data, as well as anecdotal feedback, has repeatedly shown that one of the primary concerns for landlords is managing void periods.  With that in mind, when it became apparent from our Rightmove data that the average number of enquiries per property was down, we acted quickly to address this and mitigate the risk of a void.

“Landlords told us that in key cities where competition was high such as London, Birmingham and Manchester they needed a competitive edge. Rightmove’s Featured Listings proved to be exactly that.”

Since the introduction of ‘featured listings’ as an add-on across each of its pricing options, Upad says that properties have been let, on average, three days more quickly than those marketed without.

Davis added: “It’s a competitive marketplace and securing a quality let quickly is important to our landlords.  However, in presenting options such as that offered via Featured Listings, we need to be able to demonstrate tangible benefits and last summer’s test provided just that.”

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Accord cuts cost of fixed-rate deals

April 26, 2018

Accord Buy To Let has reduced rates on selected fixed-rate products by up to 0.15%.

These reductions are being applied to two- and five-year fixed rate mortgages at 75% loan-to-value (LTV).

New deals being offered by the intermediary-only lender include a fee-free 2.62% two-year fix at 75% LTV.

Accord, which is part of Yorkshire Building Society, is also offering a five-year fixed rate deal at 2.69%, subject to a £1,495 fee.

Both of these mortgage deals provide landlords who are remortgaging with a choice of either free standard valuation and free legal fees, or £500 cashback on completion and free standard valuation.

The cashback offer is also available to landlords acquiring a new property.

Chris Maggs, commercial manager at Accord Buy To Let, commented: “Whilst two-years seem to be the term of choice for many of our customers, five-year deals are also growing in popularity as landlords look to fix for longer during the uncertain times ahead.

“We wanted to ensure that we have a number of attractive offerings available at both two and five years so landlords, with the help of a broker, can weigh up the best way forward for their portfolio.

“With a potential bank rate rise looming landlords may be savvy by plumping for a longer term deal, which could save them money in the long run. However, a shorter term will provide flexibility to react quickly should the market change over the next couple of years.”

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Surge in demand for rental properties

April 25, 2018

There has been a sharp rise in demand for rental accommodation, according to the latest report from haart.

Data from the letting agency shows that the number of tenants entering the market across England and Wales increased by 23% in March, and is up by 1.8% on the year.

But despite a rise in demand, haart report that average rents dropped by 0.7%. The average rent now sits at £1,326 across the England and Wales.

Demand for property in London has risen by 16% on the month, and by 11.2% on the year, helping to push rents up by an average of 0.4%.

With tenant demand growing, the number of landlords registering to buy has risen by 21.9% on the month, although it is worth pointing out that demand has fallen by 8% on the year.

In London, the number of landlords looking to add to their portfolio increased by 18.4% on the month, but is down 23.6% on the year.

The data also reveals that the volume of buy-to-let sales have increased 4.5% on the month in London and are up by 3.5% across England and Wales. This is down 4.2% on the year in London and by 12.2% on the year across England and Wales.

Paul Smith, CEO of haart, commented: “Despite a barrage of restrictions and additional costs as a result of government policy, many are recognising the value that can still be found in buy-to-let property, especially in comparison to the overvalued and faltering stock market.

“Although conditions are much tougher, demand from tenants is growing and if you are willing to look slightly further afield there are still yields of around 7% to be gained.”

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Tenants want their landlords to be more eco-conscious

April 25, 2018

Investing in buy-to-let property can be a great way to make money. But before parting with your cash, an investment strategy needs to be developed. Where should you invest? What sort of yields are you looking for? What ‘green modifications’, yes, ‘green modifications’, may need to be made to the home?

The way a residential building is constructed, insulated, heated, ventilated and the type of fuel used, all contribute to its carbon emissions, and can now seriously impact on the cost of running the property which is a crucially important factor to private renters, according to new research from Your Move.

The study found that 42% of tenants consider the environmental impact of a building important when making a rental decision.

Half of all tenants in London believe that property owners should give consideration to the environmental impact of their property and undertake measures to ensure that it is environmentally friendly.

Martyn Alderton, national lettings director at Your Move and Reeds Rains, said: “Whether it’s to reduce their energy consumption, save money or make a positive impact on the environment, it’s good to see that tenants consider the ‘greenness’ of a building an important factor in their rental decision.”

The survey also highlighted a correlation between the amount of rent paid and the importance of a building’s green credentials.

On average, those who pay more rent per month are also more likely to consider a building’s environmental credentials important, with 63% of correspondents who pay between £1,351-£1,600 per month expressing this view, compared to only 37% of those paying £350 or less.

Along with the building’s environmental impact, green spaces were also an important consideration for many tenants, with almost a third - 32% - of tenants surveyed saying they were interested in a communal garden and 30% were willing to pay more for a vegetable allotment.

Alderton added: “As we continue to build more and more homes for our growing population, it’s vital that we do whatever we can to create a more sustainable future for our planet and use our resources as carefully as possible.”

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Supply decline pushes Scottish rental prices up

April 25, 2018

The number of rental homes on the market in Scotland dropped in the first quarter of the year, while demand from people looking for property to rent increased, according to the latest Citylets report.

The Scottish property portal reports that average rents in Scotland ended Q1 2018 at an average of £780 per month, up 1.6% compared with the corresponding period last year.

“Supply in Scotland’s largest cities is pushing rental prices steadily upwards,” said Thomas Ashdown, managing director of Citylets. “Whilst the rate of annual growth has slowed in both Edinburgh and Glasgow, they have been rising every quarter for the last seven years in Glasgow and eight in Edinburgh.”

Ashdown believes that 2018 will be a telling year with tax changes and the increasing popularity of short term holiday sites likely to put further pressure on supply.

Edinburgh

Supply of rental property, in terms of the number of properties available to rent, has been steadily reducing since its peak in 2013. Nowhere has this been more keenly felt than in Edinburgh where annual rents have been increasing, as measured quarterly, for eight full years. However, whilst the five-year average rise of 6% will be concerning for tenants, the 10 year view of 4.2% is broadly in line with the CPI+1+N proposals for rent caps in any designated rent pressure zone. In other words, the current form of rent cap would offer the highest going rate in the open market in any of Scotland’s cities on the long term view. Rents in Edinburgh are currently at an all time high of £1,062 on average, up 3.8% on last year.


 

Glasgow

Rents in Glasgow have also been increasing steadily, not as sharply as in Edinburgh but for nearly the same amount of time- 28 consecutive quarters, seven years. Q1 2018 records a 1.2% year-on-year rise to £749 on average, overtaking Aberdeen, but growth has slowed remaining in the 1-2% range down from both the five-year average of 4.4% and the 10-year average of 3.2%. The average property in Glasgow takes one month to rent, up one day on Q1 2017. 


 

Aberdeen

Rents in Aberdeen fell below national average for the first time this quarter however this is not likely to unduly unnerve investors as the trend towards levelling off continues. The average rental property in Aberdeen costs £736 per month, down 4.2% Y-O-Y. The average property in the granite city takes almost two months to let at 58 days. 


Dundee/West Lothian/South Lanarkshire/Renfrewshire

Dundee also returned to positive growth in Q1 2018, up 0.7% Y-O-Y. The average property in Dundee rents at £614 per month and takes 46 days to let. Rents in West Lothian also posted sharp annual growth, up 4.6% Y-O-Y.


Commenting on the Scottish Market, Adrian Sangster of Aberdein Considine, said: “We believe we are seeing the first signs of a slowdown in the BTL market as tax changes from both Holyrood and Westminster begin to bite. The LBTT surcharge of 3%, which was designed to help first-time buyers by discouraging the competition of second home purchasers, does not appear to be having the desired effect. Recent research shows house purchase prices actually increased in 26 out of the 32 local authority areas. So whilst prices continue to increase it appears the supply of rented properties is falling.”

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New messaging platform designed to improve communication for landlords

April 25, 2018

A new productivity tool designed to help landlords, property managers, agents and tenants better manage their day-to-day tenancy communications has been launched by SevenBee.

The London-based start up has launched the platform to help landlords or their representatives better manage multiple properties.

The SevenBee platform allows landlords to view all their messages, files, tenants, and tasks in one place creating shared understanding between all parties. The aim is to make it easier to keep everyone in the loop and track communications.

Valentine Agamah, CEO and co-founder at SevenBee, commented: “When we talked to landlords who own multiple properties or agents who have more than ten properties in their portfolio, we quickly learned that sometimes they found it difficult keeping track of communications about a particular property.

“Most landlords use email and Excel spreadsheets, along with multiple folders on their computer, to manage their properties. As I’m sure you can imagine this is quite disjointed. I am a tenant myself and I know from experience how difficult it is to keep track of emails or repairs.”

Agamah added: “All communications about a particular property happen within each property tab. You can receive messages from your tenants, take pictures and share files.

“We designed the platform specifically for landlords and property managers to use for their communications. It is ideal for agents managing 15-50 properties”.

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Foundation Home Loans unveils exclusive 5-year fix

April 25, 2018

Foundation Home Loans has launched a five-year fixed rate product exclusively through its key packager partners.

The new product being offered is available at a fixed rate of 3.34% up to 65% loan-to-value (LTV), subject to a 2% arrangement fee.

The product offered by the specialist lender, available only through intermediaries, is aimed at individuals and limited companies and has an interest cover ratio (ICR) of 145% x pay rate for individuals and 125% x pay rate for limited companies.

For this product, Early Redemption or Repayment Charges (ERCs) are at 5%, 4%, 3%, 2% or 1% of the loan, depending on the length of time registered.

Andrew Ferguson, commercial director at Foundation Home Loans, said: “We are delighted to be offering this product via our key packager partners, who are an important part of our growth plans. This product will appeal to both portfolio and non-portfolio landlords and offers generous rental calculations.”

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What do renters look for in a rental property?

April 24, 2018

For landlords, it is not always easy to guess what prospective tenants are looking for when getting a vacant property ‘rental ready’.

From furniture and lighting to bedding and tabletop items, there is a lot that can be done to improve a property’s internal appearance and give it that homely feel; helping to showcase the impressive features available and maximise the use of space, ensuring that the home is perfect for family buyers or busy professionals.

But research looking at what matters to tenants has found that for the majority of renters cost remains the most important deciding factor when choosing a rental property.

The latest survey carried out for Cover4LetProperty by Usurv found that 77% of respondents say cost is the determining factor when choosing a rental property.

Some 68% identified location as the most important factor, while having a garden is important to almost half - 48% - of renters.

Consent to keep pet in the property was identified as the fourth most important factor at 32% followed by ease of parking at 23%.

Reflecting on the study, Richard Burgess, director at Cover4LetProperty, pointed out that the number of tenants seeking rental homes that accommodate animal is growing rapidly, suggesting that more landlords may wish to consider accommodating pets.

He said: “In February, Labour said it wanted to implement a default right for tenants to keep a pet in their rental properties. It appears that the party has found this is a popular choice for tenants and would be seen as a vote winner.

“Regardless, landlords may want to consider their own policy on pets to see if it could help rent their properties now - or they are forced to change their policy by potential new government legislation.”

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Number of limited company BTL products at record levels, says Moneyfacts

April 24, 2018

The number of limited company fixed rate buy-to-let products hit a record high this month as mortgage lenders respond to changing market conditions.

With the government currently phasing out mortgage interest relief, many landlords are looking for ways to hold on to more of their profits, and for some, setting up a limited company provides the solution, which largely explains why there are now more limited company fixed rate BTL products than ever before.

According to Moneyfacts, there are currently 235 products on the market, up from 212 in April 2017 and 80 the April before.

Charlotte Nelson, finance expert at moneyfacts.co.uk, commented: “The reality of last year’s tax changes hit landlords hard, as they were unable to claim tax relief. However, with things working slightly differently for limited companies, many landlords have started to shift their focus from individual ownership to this type of private company.”

However, borrowers considering this type of mortgage should be aware that they could find themselves on a more expensive deal compared to the rest of the buy-to-let market, according to Nelson.

She points out that the average two-year fixed rate limited company loan, for instance, has a rate of 4.29%, while the average two-year fixed rate for the rest of the market is 3.01%.

Nelson added: “With all the extra legwork that becoming a limited company entails, and how widely the costs can vary depending on circumstances, any borrowers considering it should consult a financial adviser and do the sums before committing to this option.”

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Property crowdfunding attracting growing number of millennials

April 24, 2018

There has been a significant increase in the number of millennials investing in property crowdfunding, new research by Shojin Property Partners has revealed.

The company has seen a 20% rise in millennials aged 18-30 investing in property crowdfunding projects since launching the platform last year.

Millennials now account for almost a fifth of all the people who invest in property this way through the firm, but the largest group of crowdfunding property investors are aged 30-39 which represent 44% of investors.

Shojin Property Partners say that crowdfunding appeals to millennials because it allows them to invest in property for a relatively low amount, without the need for large savings, or deposits.

Jatin Ondhia, CEO of Shojin Property Partners, commented: “With interest rates so low, millennials are losing money keeping it in a bank due to the rate of inflation. This, combined with out-of-reach property prices, is driving an increase in 18-30 year olds investing in property crowdfunding.

Shojin Property Partners has developed a variety of crowdfunding projects, allowing investors to make a minimum investment of £500, without the tax and legislative burdens.

“Our new buy-to-let crowdfunding product enables landlords and investors to come together and buy into a small portfolio of residential property for rental purposes, sharing the income and capital growth, Ondhia added. “This standard buy-to-let product offers investors income, plus a share of any profits when the property is sold, for a blended return of 5% to 10%, over five years.

He continued: “Our further two buy-to-let products are a mix of debt and equity finance and will typically offer lower returns than the core development equity product, but with a lower risk. Our capital growth equity product, offers only capital growth but no regular income, with target returns of 9% to 12% per year over five years.

“Our third buy-to-let product is an income-only, mezzanine product, secured by a second charge against the property. Investors will receive a fixed quarterly income, but none of any future capital growth on the property, with target returns of 4% - 6% per year.”

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David Salusbury, former NLA chairman passes away

April 24, 2018

David Salusbury, the former chairman of the National Landlords Association (NLA), the UK Association of Letting Agents (UKALA), and of mydeposits, has passed away after a short illness.

Salusbury, who turned his focus to property after leaving the Royal Air Force, died on Saturday at the age of 74.

He initially joined the then Small Landlords Association (SLA) in 2001, before becoming chairman of the organisation in 2003. He later changed the name of the campaigning body for landlords to the National Landlords Association (NLA).

Salusbury was chairman of the NLA until 2013, helping the organisation grow its membership base to more than 20,000.

In particular he was instrumental in lobbying for insurance-based deposit protection for landlords and agents through the creation of mydeposits, enabling landlords to retain control of the deposit, and chaired the scheme from its inception in 2006.

Remembering Salusbury, Richard Lambert, CEO at the NLA, said: “Throughout his life and career, David Salusbury commanded respect.

“He held his beliefs and principles strongly, and was prepared to be forthright in advancing or defending them.

“If this led to controversy on occasion, it also ensured that the NLA reflected his commitment to promoting high standards in rented property and supporting landlords in every aspect of their business.

“Without his drive and determination, the NLA would be unrecognisable as the organisation it is today.”

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Give councils power to ‘confiscate’ properties from rogue landlords, say MPs

April 23, 2018

Local authorities should be given the power to confiscate properties from landlords who break the law, according to a committee of MPs.

In a new report, the Housing, Communities and Local Government (HCLG) Committee calls for vulnerable tenants to be given greater protection from rent hikes, harassment and retaliatory evictions.

Although the committee accepted that recent legislation has strengthened protection for tenants, it calls for local authorities to be handed more resources to undertake their enforcement duties.

“Local authorities need the power to levy more substantial fines against landlords and in the case of the most serious offenders, ultimately be able to confiscate their properties,” said Clive Betts, chair of the HCLG Committee.

The HCLG committee said fresh funds should be made available to enable local authorities to undertake informal enforcement activities. It also wants to see local authorities publish their enforcement strategies online.

Betts added: “Stronger powers, harsher fines and a new commitment to cracking down on unscrupulous practices will go some way towards rebalancing the sector and protecting the many thousands of vulnerable residents who have been abused and harassed by a landlord.”

 

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