Property News

‘Bonkers’: More than 3,500 licensing applications rejected by council

November 16, 2018

More than three months on from the introduction of a selective licensing scheme in Nottingham, thousands of landlords remain unlicensed because their applications were rejected by Nottingham City Council for not being correctly or fully completed.

Nottingham City Council, like many local authorities across the country, insists that selective licensing schemes are important in order to improve the standard of rented accommodation and crack down on rogue landlords

However, angry landlords have slammed the council for being unprepared for what many consider to be a controversial scheme, referred to as “bonkers”, and claiming council workers were “sinking in paperwork” due to the complexity of the initiative and the high volume of applications received from landlords.

Others believes that with the council charging a standard licensing fee of up to £780 per property in the affected, helping to generate up to £23m for Nottingham City Council, landlords are simply being used as cash cows.

“It [the licensing scheme] is just a way of making money for the council”, said Mike Siebert, chair of Nottingham Park Residents Association.

Around 32,000 properties need a licence but the local authority claims that it has only received applications for 13,450 since the scheme went live at the beginning of August.

The council has so far processed 5,993 of those applications, but almost 60%, or 3,536, have been rejected due to paperwork errors.

To obtain a licence, accredited landlords must pay £480 per property while non-accredited pay £780. But some commentators believe that landlords are likely to pass the cost on to tenants in the form of increased rents, doing nothing to address affordability, while the worst landlords – the rogue operators – will simply ignore the scheme, as they do many other regulations.

Siebert added: “It backfires if rents go up. It is more expensive to rent than get a mortgage so it will be worse for them. If everyone puts up the price of rent what is it achieving?”

Designated areas in Nottingham for the new licensing scheme include Arboretum, Bestwood, Bulwell, Bulwell Forest, Basford, Berridge, Bridge, Clifton North, Clifton South, Dales, Dunkirk and Lenton, Leen Valley, Mapperley, Radford and Park, Sherwood, St Ann’s, Wollaton East and Lenton Abbey.

Giles Inman, business development manager at East Midlands Property Owners Group based in Lenton, which represents around 600 landlords, told Nottinghamshire Live: “The reality is they are sinking in paperwork. They have employed about 70 staff overall to run this licensing scheme.

“We are now over three months into this scheme and they have only a third of the applications in and still trawling through that third. There have been a lot of rejections and a lot of people phoning me up. Everyone is fed up with the whole thing.”

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Buying property now cheaper than renting in 90% of the 10 largest UK cities

November 16, 2018

Renting a property is now more expensive than buying in nine out of ten of the largest British cities, fresh data shows, suggesting that residents are financially better off, on average, buying than renting. 

Only in Bristol is the average monthly rent cheaper than average mortgage repayments, according the research by MyVoucherCodes.

It studied the average 10% deposit, monthly rent and monthly mortgage repayments in the UK’s 63 largest towns and cities and compared this to the average salary to reveal who works the hardest for their home, showcasing the number of days of hard work needed to cover these costs, excluding all other outgoings.

Here’s how the average rent compares with the average mortgage repayments per month in the UK’s biggest cities:



Average Monthly Rent

Average Monthly Mortgage










































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Scarborough Council votes in powers to fine rogue landlords up to £30,000

November 16, 2018

Rogue landlords with properties in Scarborough now face fines of up to £30,000 as the local council looks to clampdown on those failing to take their legal responsibilities seriously.

Scarborough Borough Council has voted to adopt new powers to get tough on those who break the rules.

A Civil Penalty Policy was passed by the council this week, which means that civil penalties of up to £30,000 for the worst offending landlords will now be used as an alternative and quicker way to launching criminal prosecutions in cases of serious housing offences under the Housing Act.

Aside from civil penalties of up to £30,000 as an alternative to prosecution for certain specified offences, the new powers also include an extension of Rent Repayment Orders so that they now cover illegal eviction, breach of a banning order, failure to comply with an Improvement Notice, and certain other specified offences.

There will also be a database of rogue landlords and agents who have been convicted of certain offences or received multiple civil penalties, with the option of banning orders for the most serious and prolific offenders.

Scarborough Borough Council’s cabinet member for housing, Cllr Bill Chatt, said: “Offences can include things like; we serve an improvement notice to a property because it's damp, cold, it's got a lot of issues going on and the landlord doesn't work with us in the timescale to work that through.

“So then we get to a point where we say it hasn't been improved, and then we can decide what fine to hand out based on the impact it has had on the tenant.

“The maximum fine is £30,000 but there is an appeals process in this. We still have to gather the evidence as if we're still going to court.

“The appeals process will now go to a panel who can decide that the civil penalty could be upheld or it could be turned down, but what we're saying to the landlords is that it's better to work with us than against us.”

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New expat buy-to-let range launched by Marsden BS

November 16, 2018

Marsden Building Society has unveiled two new expat mortgage products for landlords looking to acquire or remortgage a buy-to-let property in the UK whilst living abroad.

The new buy-to-let products, which includes a two-year discount rate of 2.99% or three-year discount at 3.09%, come with a £299 booking fee and 0.6% arrangement fee. Landlords looking to remortgage can expect to receive £300 cashback on completion.

Heather Crinion, general manager of operations at the Marsden, commented: “We’ve released our new and improved expat portfolios to support intermediaries with expat clients looking for solutions.

“We’re continually innovating our expat ranges to support intermediaries in their expat business, recent changes have seen introduction to expat products to all intermediaries, a re-introduction of Qatari Riyal to our accepted currencies and product portfolio changes.”

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The mortgage industry is “not fit for purpose”, claims Together

November 15, 2018

Panoramic views of London, little noise pollution, three generous sized bedrooms and the prospect of a near 9% gross rental yield - these are just some of the primary reasons why buy-to-let investor Adam Jones recently made an offer on a flat in Camden, north-west London. But when he applied for a mortgage, he discovered a lack of appetite from lenders, and was unable to secure the funds required to move forward with the deal.

Older blocks and ex-local authority are notoriously hard to maintain, which partly explains why it is harder to secure finance. But even some new build luxury high rise schemes encounter issues when prospective purchasers attempt to get finance to buy property, due to the fact that very few lenders will consider lending against any flat in a building that has multiple storeys.

Part of the problem is that the mortgage industry is “not fit for purpose” because it is failing to keep up with modern borrowers’ needs, according to Together.

A new survey commissioned by the specialist lender suggests that more than half of mortgage applicants were rejected for lifestyle choices including being self-employed or buying a converted home.

The study of the market found a huge percentage of mortgage applicants - 54% who’d fallen out of the application process - had been denied a home loan for reasons that could be considered ‘normal’ by most people.

These included factors once believed to be ‘non-standard’ such as their employment type; they could be self-employed, a contract worker or take a dividend, or the type of property they were looking to buy, including conversions or high-rise flats.

Pete Ball, personal finance CEO at Together, believes that many mainstream lenders need to keep pace with the demands of these types of borrowers, and stop relying on a computer-automated approach, and outdated and rigid criteria - when deciding mortgage applications.

He said: “The world has changed. People’s pay, working patterns and pensions have altered beyond all recognition from 30 or 40 years ago. Even where they live, who they chose to live with, or the type of property they want to buy is vastly different from a generation earlier.

“What was previously thought to be ‘normal’ simply doesn’t exist anymore.”

Together’s wide-ranging study, which was conducted by market researchers YouGov, surveyed about 2,000 people about mortgage applications and the reasons why some of them had fallen out of the mortgage application process.

Some 10% were denied because the property they wanted to buy was considered ‘non-standard’, which could mean anything from a converted barn to a high-rise flat.

Ball added: “We recognise that was once considered unusual or specialist is now becoming more normal, and the mainstream needs to be able to adapt to the changing world.”

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Decline of buy-to-let prompts ‘exciting time for renters’, says JLL

November 15, 2018

The number of properties acquired by landlords has dropped significantly over the past couple of years following the tax and regulatory clampdown, prompting a leading banking body to downgrade its forecast for buy-to-let lending in 2018.

UK Finance said buy-to-let activity was slower than anticipated so far this year, with lending falling faster than expected as many landlords hold back from buying property in response to significant tax changes and tighter lending rules.

At the start of the year, UK Finance had predicted £12bn of buy-to-let lending for residential property acquisitions in 2018, but with fewer people investing in the buy-to-let sector, Jackie Bennett, director of mortgages, estimates that lending will likely hit just £9bn this year.

“This is undoubtedly the impact of various tax, regulatory and legislative changes that have happened to landlords in the buy-to-let sector,” she said last week.

Although less favourable tax treatments and higher stamp duty have ‘dampened’ the role buy-to-let investors play in the housing market, as reflected by a slump in lending to buy-to-let landlords, reducing the new supply of much needed private rented stock from private landlords, this trend does appear to have a “silver lining for tenants”, according to JLL.

The company points to the fact that a “new type of investor will flood the buy-to-let market” providing renters with an “alternative tenant experience” and digital construction and milestone infrastructure projects “will offer plenty of opportunities for the industry in the next few years”.

Adam Challis, head of UK Residential Research at JLL, commented: “Government initiatives have unwittingly caused a step change in the rental market, sparked by a decrease in uptake of buy-to-let mortgages by individual landlords, put off by muted house price growth and lack of financial incentives.

“This gap in the market is accelerating investment by their institutional counterparts, providing tenants with a new reality when it comes to renting – one where they are less exposed to ‘amateur’ landlords and more likely to be dealing with a well-organised corporate entity with a real commitment to tenant service.”

JLL predicts a bright future for the UK housing market. A new phase of affordability and a sharp rise in confidence are forecast, taking hold first in London and the South where prices will rise quickly assuming the deal on Brexit is agreed by Parliament. 

It forecasts that house prices across the UK will rise by 11.4% in the next five years, supported by growth in the number of UK housing transactions per annum which it forecasts will hit 1.15m in 2019 rising to 1.32m in 2023.

Challis said: “The expected upswing in the market over the next five years is predicted amidst a difficult era where uncertainty surrounding Brexit has dented consumer confidence, casting a shadow over personal finances and negatively impacting the UK housing market.

“However, JLL believes that there is a 90% probability of a Brexit deal being negotiated, which will enable the UK economy to steadily improve during 2019 and into 2020. With UK earnings growth set to return to a more normal rate of 4% pa by 2021, real wage growth and more modest property price increases will unlock transactions that have been hampered by a lack of affordability.

“From 2021, we expect greater economic certainty to improve business and consumer confidence, which will lead to a more buoyant housing market and a return to growth in house prices.”

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Buy-to-let lending slumps as tax reforms deter landlords

November 15, 2018

Buy-to-let mortgage activity slowed dramatically in September, as the number of landlords taking out new home loans dropped by almost a fifth, owed largely to regulatory and tax changes.

Landlord investors took out just 5,200 new buy-to-let mortgages for acquiring properties in September, down 18.8% on the corresponding month in 2018, while the total value of BTL loans dropped by 22.2% to £700m, according to the latest figures from UK Finance, the industry body.

Fewer buy-to-let investors are actively looking to invest following the stamp duty and income tax crackdown, resulting on a squeeze on many landlords’ profits.

Jackie Bennett, director of mortgages at UK Finance, said: “Buy-to-let home purchases have eased again in September, suggesting lending in this market remains subdued as a result of recent tax, regulatory and legislative changes.”

Meanwhile, there were 12,300 new buy-to-let remortgages completed in September, marginally down by 0.8% on September last year.

Bennett added: “Overall remortgaging for both residential and buy-to-let properties have levelled out after a period of strong growth. This reflects the number of fixed rate loans reaching maturity.”

At the start of the year, UK Finance had predicted £12bn of buy-to-let lending for residential property acquisitions in 2018, but with tax changes eroding landlords’ returns, fewer people are investing in the buy-to-let sector, and as a result, Bennett estimates that lending will likely hit just £9bn this year.

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Plymouth offers the highest student accommodation yields

November 15, 2018

Plymouth has been identified as the top location for landlords looking to invest in purpose-built student accommodation in the UK by yieldit.

According to the buy-to-let agency’s available student properties, the city commands average net yields of 7.24%, beating all other areas in terms of profitability.

Student landlords in Leeds receive the second highest returns at an average of 6.57%, boosted by the University of Leeds’ status as one of the UK's largest institutes of higher education with more than 34,000 students.

Sheffield ranks third with an average of 6.24% and, in close succession, Liverpool at 6.23%. Both cities are considered vibrant student centres, each home to more than one university and thousands of students competing for accommodation.

Making up the top five is Nottingham with an attractive average net yield of 6.17%.

Middlesbrough, with an average net yield of 6.14%, ranks marginally behind the likes of Liverpool and Sheffield.

Ryan Hughes, head of sales at yieldit, commented: “Investment in purpose built student accommodation is an excellent way for buy-to-let investors to diversify and continues to offer excellent returns thanks to the world-class reputation of higher education institutions in the UK.”

“Predictably the best performing areas are those which are the most popular among students looking for a comprehensive university experience, with everything from specialist courses to a fantastic nightlife. With that in mind we expect that other locations on the list will continue to climb in the profitability rankings as they invest further in their universities and campuses grow in size.”

Average net yields of student accommodation according to yieldit's available properties:

Plymouth – 7.24%

Leeds – 6.57%

Sheffield – 6.24%

Liverpool – 6.23%

Nottingham – 6.17%

Middlesbrough – 6.14% 

Bolton – 5.97%

Chester – 5.90%

Glasgow – 5.84%

Sunderland – 5.73%

Newcastle – 4.77%

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Octopus puts buy-to-let lending on hold

November 15, 2018

Octopus Property has announced that it is currently not accepting new buy-to-let applications after being ‘inundated’ with demand for its products.

A note on the specialist lender’s website reads: “Our buy-to-let products are taking a break, but don’t worry, they’ll be back in the new year.”

An Octopus spokesperson commented: “Following a very successful relaunch of our residential and commercial term loan products this Autumn, we’ve been inundated with deal flow to the point that we have filled our allocated budget for term funding well ahead of schedule.

“As a result of this demand, we have chosen to take a pause on accepting new applications for these products until the New Year whilst we manage the current pipeline of business. It’s still business as usual for our other products.”

It is not clear at this stage when Octopus Property’s BTL products will become available again in the New Year.

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New government housing court plan is ‘good news for landlords and tenants’

November 14, 2018

The launch yesterday of a consultation by the government on establishing a new housing court has been welcomed by the Residential Landlords Association (RLA).

The proposals unveiled by Communities Secretary James Brokenshire would see landlords and tenants receive faster and more effective justice in the event of property disputes.

Government will seek views on a specialist housing court which, if created, would provide a single path of redress for both landlords and tenants, giving them the power to resolve the dispute.

Housing disputes are currently held in a number of different legal settings, which can often lead to confusion and act as a deterrent to some of the most vulnerable seeking justice.

But the government hopes that its proposals will help to address these issues, providing landlords with the confidence to offer longer and more secure tenancies.

Brokenshire said: “Everyone deserves to live in a safe and decent home, and this government is bringing about real change in making renting more secure.

“This is particularly important for families and vulnerable tenants who live with the fear of suddenly being forced to move, or fear eviction if they complain about problems with their home. It is also important for landlords who, in a minority of cases, struggle to get their property back when they have reason to do so.

“The proposals announced will help ensure both tenants and landlords can access justice when they need it – creating a fair housing market that works for everyone.”

Introducing a housing court that helps to improve and speed up access to justice would be “good news for landlords and tenants”, according to David Smith, policy director for the RLA.

He added: “It will help root out criminal landlords more quickly, give tenants better ability to enforce rights granted by new legislation on property fitness, and give greater confidence to landlords to offer longer tenancies.”

The consultation will run until 22 January 2019.

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Portico teams up with Airbnb as London’s short-term rental revolution continues

November 14, 2018

Portico’s short term lettings service, Portico Host, has been appointed to Airbnb’s professional co-host programme, bringing Airbnb services to London’s high streets.

The estate agency, which currently has 17 high-street offices throughout zones 1-4 in London, becomes just the sixth co-host partner in the UK and the first mainstream lettings business to be appointed to the programme, which was launched in January 2018.

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

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

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

Portico’s new business director, Fiona Patterson, said: “Our partnership with Airbnb is the beginning of the new age of estate agency. Customers will now be able to walk into a Portico office on the high street and list their properties for rent through Airbnb in the same way that they would for long-term tenancy, with teams that are experienced in managing people’s homes and tenants. It is a unique proposition.

“An established business on the high street, offering an in-house service specifically designed for short term lets, backed by an award winning and trusted brand that truly understands how to look after a home.

“Our short-term letting service has more than doubled in the last year. Now, with the support of Airbnb, we are looking to fulfil the demand for a trustworthy short let management service. The co-host programme is designed to run alongside our traditional sales and lettings offerings, giving landlords the option to maximise their yields by using Airbnb during void periods, and enabling sellers to let out vacant properties on the market.

“With this service, we are one step closer to offering a full-service solution for every element of home ownership and optimising the consumer experience, which is our goal.”

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Controversial landlord faces huge fine for leaving disabled tenant without hot water

November 14, 2018

Britain’s biggest and arguably most contentious buy-to-let landlord could be slapped with an ‘unlimited’ fine after leaving a wheelchair-bound tenant without hot water for five months. 

Fergus Wilson, who owns hundreds of residential properties in Ashford and Maidstone, caused controversy earlier this year when he said that he would evict single women who become pregnant and single mums with newborn babies.

Wilson also rejects battered wives and plumbers as tenants, along with ‘coloured people’ because he says that they make his properties ‘smell of curry’.

Now his wife Judith, 68, who he owns his properties with, has been found guilty of failing to comply with an enforcement notice ordering her to supply hot water to a disabled tenant and must now reveal her wealth to a court as a judge has the power to sentence her with an unlimited fine.

District Judge Justin Barron said Wilson would suffer a ‘punitive fine’ after Folkestone Magistrates’ Court heard how her former tenants Sarah and Mark Manser, who is wheelchair-bound, went without upstairs hot water for five months.

However, in a statement outside court, Fergus Wilson told the press that the ruling could result in the eviction of potentially hundreds of tenants, as the couple look to sell off their property portfolio.

Wilson said: “Let's see what happens with the fine, but it means we will be selling more properties.

“We were selling up anyway because of our age - I could drop dead tomorrow.

“We won't be giving people notice to quit over the Christmas period and to be honest we would sell the whole lot tomorrow if we could.

“We won't put all the homes on the market at once because that would mean house prices will drop.”'

The case has been adjourned for sentencing on December 11 at Folkestone Magistrates' Court. 

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Section 8 process is ‘no longer fit for purpose’, NLA says

November 14, 2018

A review of the section 8 possession process is urgently required, according to the National Landlords Association (NLA).

As many of you will know, an assured shorthold tenancy can be terminated principally by reliance on section 21 or section 8 of the Housing Act 1988 (as amended).

However, following the government’s call yesterday for evidence to consider the case for a housing court, the NLA believes that now is the right time to re-evaluate section 8.

For the successful possession claims, research shows that there is an average period of 18 weeks between claims and repossessions, which can cost up to £355 per claim in court fees alone.

The landlord also has to cover legal costs and may face losses when tenants are in arrears and stop paying rent.

The NLA’s latest survey of landlords reveals that it can take an average of 145 days to regain possession of a property at a cost of £5,730.

Rent arrears is the most common reason for a landlord to file a section 8 possession claim. The NLA’s landlords panel found that 36% of landlords experienced rent arrears and 15% have sought to regain possession in the last year.

The alternative to section 8 is section 21, where no reason is needed and gives tenants two months’ notice. But this can only be used after a fixed-term tenancy ends or during a periodic tenancy.

Landlords often serve both notices simultaneously as it provides greater certainty of vacant possession. This can be vital when a landlord needs to sell the property or move in themselves.

Richard Lambert, CEO of the NLA, said: “As it stands, the system is failing and needs urgent reform. Landlords are forced to rely on section 21 ‘no fault’ notices, even when there is a breach in tenancy. This is essentially a sticking plaster covering the fundamental issue – that the section 8 process is no longer fit for purpose.

“While the majority of tenancies are ended by the tenant, landlords need to be confident they can regain possession of their properties efficiently in the event of a breach of tenancy to effectively manage their business risk.”

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Free Landlord Information Evening to be held for landlords in Reading

November 14, 2018

Buy-to-let landlords in Reading are invited to attend a free Landlord Information Evening being held at Reading’s Civic Offices in Bridge Street tomorrow.

The event, which will take place on Thursday from 6.30pm, will feature a number of optional workshops for landlords to choose from, including an update on the licensing of Houses in Multiple Occupation (HMO) and Pest Control in rented property.

The National Landlords Association will be giving a presentation on recent and upcoming developments in the sector, HGR Accountancy Ltd will be on hand to cover tax updates for landlords, and the Rent Guarantee Scheme will offer a 'tenancy toolkit' session covering changes in legislation around notices and rent increases in assured shorthold tenancies.

Landlords will be offered the opportunity to speak to a variety of teams from Reading Borough Council and there will be plenty of opportunity for networking.

Cllr John Ennis, Reading’s lead member for housing, who will be attending, said: “The private rented sector is very important in Reading and the Landlord Information Evening is a great chance for landlords to get together, meet members of the Council’s housing team and to share information with others in the industry.

“There have been some major changes to legislation affecting landlords of HMOs this year and this will be a great opportunity to get an update on the new rules.  Industry experts will also be on hand to offer information and advice on a wide range of topics, including tax issues, rent levels and pest control.”

To book a place, email: or phone 0118 937 2233.

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It’s ‘not all doom and gloom’ for the BTL sector, but where are the yield hotspots?

November 13, 2018

Buy-to-let landlords who have adopted a high yielding investment strategy may be interested in new analysis of the BTL market that reveals where the best investment opportunities currently are.

The research, undertaken by Shawbrook Bank, has identified the North West and Scotland as the top UK hotspots to invest for yield at the moment.

Shawbrook Bank’s research shows the North West region, and the city of Manchester in particular, to be the top new investment hotspots due to higher rental yields, with an average rental 5.4% achievable in the region, thanks in part to lower property prices.

Lower property prices mean it is easier to achieve better rental yields and the city is attracting students and employees from all around the country. The average UK house price is currently £228,000, which is 43% higher than the average house price in the North West - £159,000. 

Although the North West leads the ranking, Scotland also offers attractive rental yields, at an average of 5.3%, followed by Yorkshire and the Humber with 4.9%. 

Emma Cox, ‎sales director for commercial mortgages, commented: “Landlords have had a rough ride over the past few years with multiple tax changes, but our research shows that it’s not all doom and gloom for potential investors in 2018.

“Lower rental yields in London and affordability constraints for investors has driven interest North, where borrowers are chasing the yield and heading to locations with lower average house prices.”

Looking at residential property prices, the research from Shawbrook Bank predicts annual property price inflation to be more subdued in the five years up to 2023 than over the last few years.

The report forecasts average annual house price predictions for the years 2017 to 2023 to be at 4.5%, compared to an average of 7% for the high-growth years of 2014 to 2016.

Stretched affordability ratios, years of weak wage growth and the prospect of further interest rate rises all weigh in on the outlook for house prices in the UK for the next few years.

Shawbrook Bank expects price growth in London to continue to trail behind the rest of the country for the next two years, due partly to the fact that fewer investors from overseas are investing in the English capital.

According to fresh data from estate agent Aston Chase, the percentage of high-end purchases from overseas in London’s most expensive postcodes dropped from 44% in 2016 to 35% last year.

Cox added: “There are still interesting times ahead for savvy investors and good investment opportunities remain. However, when landlords invest far away from their home turf, they can run the risk of falling foul to local knowledge.

“Smarter local investors may be seeing an opportunity to divest themselves of their less desirable housing stock, so it’s important for buyers to do their research to make sure they understand the local supply and demand before investing.”

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Top 10 buy-to-let hotspots

November 13, 2018

Colchester has been identified as the number one place to currently invest for buy-to-let, based on rental yields.

The LendInvest BTL Index regularly ranks 105 postcode areas around England and Wales based on a combination of four critical metrics: capital value growth, transaction volumes, rental yield and rental price growth, and based on the latest data Colchester moves into top spot.

Ranked in second place is Stockport, followed by Manchester, Birmingham, Canterbury, Coventry, Wolverhampton, Peterborough, Enfield and Luton.

Ian Boden, sales director at LendInvest, said: “As we edge towards the new year, and subsequently the date we are due to leave the EU, all investor’s eyes are on the performance of the UK property market. This is a time where our data is our best ally in making the right choices for long term investment.


“This quarter has returned some interesting results. Smaller towns in both the North and Midlands are making swift gains up the table to rival the typical hot spots in each region. Stockport has taken the lead over Manchester this quarter, and Harrogate is in hot pursuit of its larger neighbour Leeds.


“Looking towards the center of the UK, Midlands cities Wolverhampton and Peterborough have smashed into the Top 10, joining successful regional capital Birmingham. The growing opportunity for BTL investors in these regions reflects a knock on effect of investment in these key cities.


“Locking down a solid prediction of how the landscape will look into the New Year is no easy task. In this instance, we know it is best to let the data do the talking.”

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Landlord could have license revoked after tenant disputes legality of eviction

November 13, 2018

A buy-to-let landlord in Edinburgh, who faces losing his license after evicting a young family, is appealing to his other tenants for help to avoid being blacklisted by the council.

David Love, who owns a portfolio of 15 buy-to-let properties in and around Edinburgh, hit the headlines earlier this year after evicting mum-of-nine Donna Newby and her children, who had occupied the flat for nine years, for not paying the rent.

Aside from face being homeless, the family had all their possessions dumped in the street by their landlord, who is also an amateur boxer, with several items, including TVs, laptops and electronic toys, broken beyond repair.

No one was in when Love and his helpers turned up at the flat in Edinburgh’s Drylaw in March.

They piled the family’s possessions up outside before Newby, 41, arrived home to find her belongings heaped together outside.

The tenant had fallen behind on her rent after missing a JobCentre appointment and losing her housing benefit.

But left with “almost nothing”, Newby has decided to take action against the landlord, which could lead to Love’s license being taken away from him.

A council spokeswoman said: “We can confirm that the revocation of Mr Love’s registration will be considered in private by the council’s licensing subcommittee.”

“The City of Edinburgh Council requested information held by Police Scotland as part of an assessment on the suitability of a registered landlord, following an eviction in Drylaw in March 2018. The information was provided,” she added.

Fearful of losing his license, Love is calling on his other tenants, typically families on low incomes, to back him or face potentially being made homeless.

Love told the press: “If I was to lose my landlord license then the 15 families who rent houses from me will be facing homelessness as I will be forced to evict them all and sell the properties.

“So I ask that the licensing committee consider the wellbeing of the families that will be made homeless by this decision. “Most of my tenants have children and are on benefits. Three of my tenants are on disability benefits. They have little chance of getting another family home in their area.”

He added: “They [his tenants] are all really worried about the possibility of being made homeless due to this licence fiasco.

“There are 15 families facing homelessness this Christmas because of this licence fiasco.

“Even if I deserve to lose my licence - which I don’t - why should all my tenants lose their homes because of it?”

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Landlord left with more than £4,000 rent arrears by unscrupulous tenant

November 13, 2018

A buy-to-let landlord has been left with a major clean-up bill after a tenant from hell trashed his rented home in Malvern, Worcestershire, leaving it in a terrible state, before disappearing owing more than £4,000 in rent.

Neil Cooper, 54, was forced to issue his tenant with notice to vacate a property he owns in Malvern Link, WR14, after missing several rent payments.

Cooper told the Kidderminster Shuttle that the tenant had been in the property in Malvern Link for just over a year when he missed a rent payment in April.

“They missed the first rent payment and I thought, ‘well everybody struggles for cash from time to time’, so I let them off,” Cooper said.

“The tenant then failed to pay again and I couldn’t reach them via email. The letting agency also tried to get hold of them and got no response.

 “Eventually, after three months with no response, we were getting worried and the letting agents told them that if they failed to make the payment again, legal action would be taken, and they would be evicted.”

After still receiving no reply, the landlord sought consent to evict the tenant. But when he visited the property, he discovered that the tenant had actually moved out, leaving the house in “a right state”.

Cooper added: “When I opened the door it immediately seemed as though the tenant had left in rather a hurry.

“The place was a right mess, there were empty glasses all over the place, food left lying around and clothes still left there.

“We have had to take up the carpets and get new flooring sorted. The bathroom sink was smashed so that has had to be repaired as well as the two broken doors in the house.”

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Growing number of people looking to rent in retirement

November 13, 2018

Private renting has more than doubled over the past 20 years, and young people are by far the most likely age group to be renting.

During the same period, home ownership among young adults has dropped dramatically, with many people fearing that they will never able to afford to buy their own home.

A recent study, carried out by Bilendi on behalf of GoCompare Mortgages, found that 31% of tenants in rented accommodation cannot imagine ever owning their own home, suggesting that many of them will be tenants for life.

Separate research from the ONS found that parts of the country are expected to have populations with 40% over the age of 65 over the next twenty years. 

The findings show that West Somerset is set to be the most elderly part of the country, with 44% of locals expected to be 65 years and over by 2037.


Other areas such as West Dorset, North Norfolk and Rother in east Sussex are expected to have 40% over the age of 65 by 2037, whereas parts of London and Manchester will only have between 10-13% over this age.

Gillian Girling, chief executive of Girlings Retirement Rentals, said: “We are an ageing nation and so it’s to be expected that many parts of the UK will have a greater number of over 65s, especially areas that are popular to retire to such as Somerset and Dorset.

“However, 65 is no longer considered old and people on average will live a quarter of their lives retired. Moving somewhere new and vibrant with great facilities and amenities close by and access to a good social life to enjoy this stage of their lives is increasingly important for many.

“Growing numbers of this age group are now choosing to downsize and rent in these locations.”

Freeing up capital for the sale of a home and not having to worry about ongoing property maintenance, are among some of the primary reasons why more people are choosing to rent in retirement, according to Girling.

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Landlords vote ‘trustworthiness’ as the most important quality in tenants

November 12, 2018

Every good landlord deserves good tenants, and every good tenant deserves a good home. But what makes a good tenant?

Fresh research suggests that ‘trust’ is the most important element for an effective, efficient, and harmonious relationship, crucial to a happy tenancy for not only your tenant but yourself as a landlord.

Your Move’s Landlord Survey, which polled 1,071 landlords and tenants to learn more about their portfolios, behaviours and attitudes towards tenants, agents and the lettings market, shows that landlords vote trustworthiness as the most important quality in tenants.

The research found that 42% of landlords believe having trustworthy tenants is more important than receiving rental payments on time.

When broken down by landlord type, this trend was especially prominent for ‘Pension Pot’ and ‘Accidental’ landlords, who account for 41% and 29% of the buy-to-let market respectively.

Your Move’s annual Landlord Survey defines ‘Pension Pot’ landlords as those who are over the age of 45 and view their portfolio as a long-term retirement investment.

‘Accidental’ landlords are those who were not expecting to be landlords and are often forced into the market through inheritance or changes in personal circumstances.

Just over a quarter - 26% - of landlords’ surveyed rate tenants who pay on time as the most important consideration.

Just over half - 51% - of tenants surveyed cited a property’s condition as the most important factor, followed closely by value for money (40%).

In joint third place was the quality of the landlord, good communication with an agent, and security of the property, all of which were named by 37% of respondents.

Martyn Alderton, national lettings director at Your Move, said: “Our survey results should highlight that landlords often share the same values and expectations as tenants.

“Both parties appear to prefer peace of mind with landlords expecting tenants to look after their property and, in turn, tenants expecting their landlord to provide a good quality home for them in return for the payment of a reasonable rent.

“As an industry, it’s important that we match tenant and landlord expectations carefully and support these relationships, providing tenants with a property to call their home and landlords with tenants who will look after their properties.” 

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Landlords accused of ‘illegally’ withholding deposits

November 12, 2018

Buy-to-let landlords have been accused of “routinely and illegally” withholding deposits from tenants and subjecting many people living in private rented accommodation to “surprise evictions”.

In an article in yesterday’s Mail on Sunday, it was claimed that students and young adults early in their careers are typically “most vulnerable” when it comes to not getting their full deposit back after vacating.

The article pointed to “evidence from multiple sources” that suggests landlords often break the law by fully or partially withholding money stumped up as a deposit, which are often not placed in a government-backed deposit tenancy deposit protection scheme (DPS).

Reference is made to recent research by Nationwide Building Society that claims half of students do not get their full deposit back while at university and that they lose an average £150, along with a separate study by comparison website that reveals a third of renters know their landlords have not placed their money into a government-backed DPS.

Polly Neate, chief executive of homelessness charity Shelter, said: “Every day our advisers hear from people trying to navigate the common pitfalls of renting – from unprotected deposits and unfair terms in tenancy agreements, to dangerous conditions.”

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Landlord’s son ordered to pay £1,650 after changing locks over rent arrears

November 12, 2018

A landlord’s son has been ordered to pay £1,000 compensation to a tenant after changing the locks with her belongings still inside the property in Nottingham.

Aside from pay compensation, city magistrates also ordered Mohammed Azheem, 32, to carry out 120 hours of unpaid work, pay Nottingham City Council’s costs of £600 and a government surcharge of £85.

The court told Azheem, who has helped his father manage his property portfolio since he was 18, that his actions had caused the tenant, who was renting the two-bedroom flat on a six-month tenancy agreement, a great deal of distress, owed in part to language problems.

After the tenant fell into rent arrears, Azheem, also referred to as ‘Jimmy’, turned up at the rental property without prior notice, used his own keys to enter the flat, and eventually changed the locks.

Sarah Mills, on behalf of Nottingham City Council, said that Azheem also sent the tenant a number of WhatsApp messages demanding the outstanding rent.

“On January 18, they [the WhatApp messages from Azheem] became more aggressive, telling her [the tenant] to move out or he would change the locks,” said Mills.

When the locks were eventually changed, the tenant was unable to retrieve her belongings.

Azheem pleaded guilty to unlawfully depriving the woman of her residence.

Presiding magistrate Nikki Whitelaw told him: “This is a very severe offence in that someone has been deprived of their residence.

“It was aggravated by the fact that this individual is Hungarian and has language challenges as well.”

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Tenant causes almost £6k worth of damage after refusing to pay rent

November 12, 2018

A tenant who caused almost £6,000 worth of damage to his rented home after refusing to vacate the flat, despite being served notice by his landlord, has pleaded guilty to damaging the property in Delabole, north Cornwall, between January and April this year.

David Pearson, 46, appeared at Truro Crown Court on Friday, where he was sentenced to a 12-month community penalty, including 25 rehabilitation activity requirement sessions and 120 hours of unpaid work, and ordered to pay £1,000 in compensation to the landlord.

Deborah Roberts, who owns the property, was also advised by the court to pursue further damages through civil proceedings.

The court heard that Pearson, who was living at the property with his elderly mother, committed the damage following a breakdown in his relationship with Roberts, after denying the landlord entry into the property.

Prosecuting barrister Phillip Lee told the court that Pearson had caused damage to the boiler and cupboard, a kitchen cupboard, an electrical socket, a wall and a ceiling, while a built-in cupboard and door were also missing.

“This is a sorry tale,” Lee said. “This would appear to be deliberate damage following the altercation in March.

“The defendant admitted he made alterations and caused damaged but claimed he intended to make good. He alleged that shoddy workmanship had caused some of the problems.

“This man has some previous convictions for threats and violence.”

The precise cost of the damage, estimated to be over £5,700, is currently in dispute.

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Real rents have fallen in real terms over the last decade

November 12, 2018

The outlook for renters has improved over the past decade, albeit with considerable regional variations, thanks to improved affordability, new figures show.

Real rents, adjusted for inflation, have fallen by 2.2% in Great Britain since October 2008, which means that the average cost of living has risen more than average rents, according to new data from Hamptons International.

Over the past decade, inflation (CPI), which measures the average cost of goods and services - or the cost of living - has risen 24%, outpacing rents, which are up by an average of 22% over the corresponding period.

Inflation has outpaced rental growth in all regions across Great Britain, resulting in negative real rental growth, with the exception of the East of England and London, where rental growth has outpaced inflation over the past 10 years, at an average of 7.5% and 0.5% respectively.

The Midlands has seen the biggest fall in real rents, down 7.8% since October 2008, while real rents in the North have dropped 6.9% as inflation has outpaced rental growth.

Aneisha Beveridge, head of research at Hamptons International, said: “Real rents in Great Britain have been falling for the last 21 consecutive months. This comes as a result of sluggish rental growth and a post-EU referendum backdrop of rising inflation.”

However, this trend could be set to change as inflation begins to fade and rental growth starts to pick up pace, according to Beveridge.

Rental growth on new let properties accelerated to 2% to hit an average of £977 per calendar month across Great Britain in October 2018, the highest level since February as every region recorded a rise in rents.

The East of England saw the biggest jump in rents, up 3.9% year-on-year, while Scotland saw the slowest rental growth at 1.1%.  Meanwhile rents in London grew for the second consecutive month, up 1.4% year-on-year, driven by a 2.7% annual rise in inner London rents.

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BTL mortgage arrears fall, but concern grows about impact of Universal Credit

November 9, 2018

The number of buy-to-let mortgages in arrears of 2.5% or more of the outstanding balance dropped in the third quarter of this year, reflecting a wider trend in the market.

Figures from UK Finance found that there were 4,660 buy-to-let mortgages in arrears in this level in Q3 2018, down 1% on the same period last year.

“Thanks to incredibly low interest rates, mortgage arrears and possessions continue to remain at historic lows,” said Shaun Church, director at Private Finance.

The affordability of mortgages is a story often overshadowed by the focus on the UK’s housing crisis,” he added.

However, there were 1,150 buy-to-let mortgages with more significant arrears (representing 10% or more of the outstanding balance) in Q3 2018, which is up 3% on the corresponding quarter of 2017.

Mark Pilling from Spicerhaart Corporate Sales, who deals with arrears and repossessions on behalf of lenders, suggests the issues with Universal Credit could be a factor in this rise.

He said: “The latest arrears and possessions statistics reveal that while arrears and possessions on residential properties remain historically low, there has been a 3% increase in the number of buy-to-let mortgages in significant arrears compared with the same quarter of the previous year. These figures suggest that the problems with Universal Credit are now really starting to impact landlords.”

Based on responses from over 2,200 landlords, the Residential Landlord Association’s (RLA) research exchange, PEARL, has found that 61% of landlords with tenants on Universal Credit have experienced them going into rent arrears. This is up from 27% in 2016.

The study found that on average Universal Credit tenants in rent arrears owed almost £2,400, which is up almost half - 49% - compared to last year. 

Piling added: “Universal Credit has been plagued by problems since it was introduced, and while the government announced in the Budget that more money will be dedicated to the new welfare system, it is clear that much of the damage has already been done.

“Many claimants experienced huge delays in receiving their money, forcing them into arrears, and many are receiving far less than they did with the old system, which means in many cases, they simply do not have enough money to pay their rent on their reduced incomes.

“From a lenders point of view, it is important that they keep a close eye on their buy to let customers who have tenants who are on or are soon to be moved onto Universal Credit so they are able to work out the best solution for those who are struggling so that repossession is a last resort.”

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Government’s new £2m rogue landlord crackdown is a step in the right direction

November 9, 2018

Yesterday’s announcement that councils in England are going to be handed an additional £2m in government funding to tackle the small minority of landlords who continue to break the law and offer inadequate or unsafe housing has been broadly welcomed by most of those who invest in the private rented sector, but there is a general feeling among some that more needs to be done.

Local authorities already have strong powers to require landlords to make necessary improvements to a property and can use a range of measures, including fines and banning orders, to tackle rogue landlords.

But now councils can apply for new funding to step up enforcement action against rogue landlords providing substandard accommodation.

Housing Minister, Heather Wheeler, said: “Everyone deserves to live in a home that is safe and secure, and it is vital we crackdown on the small minority of landlords who are not giving their tenants this security.

“This funding will help further strengthen councils’ powers to tackle rogue landlords and ensure that poor-quality homes in their area are improved, making the housing market fairer for everyone.”

There are more than 4.5 million households in the private rented sector in England, with official statistics saying that 82% of private renters are satisfied with their accommodation.

David Smith, policy director for the Residential Landlords Association (RLA), has welcomed news of fresh funding for enforcement, but believes that it must be part of a “long term and sustainable settlement” that provides the resources needed to “support good landlords and root out the criminals”.

He added: “Poor enforcement of the wide range of powers already available means that the minority of landlords who bring the sector into disrepute undercut the majority of good landlords and bring misery to the lives of their tenants. This is what the funding needs to tackle.”

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Aldermore cuts rates on 5-year fixed rate BTL remortgage products

November 9, 2018

Aldermore has reduced the rates on its buy-to-let five-year fixed remortgage products for individual landlords and company landlords by 0.2%.

Individual landlords submitting remortgage applications through the specialist bank’s residential portal will find that they have access to a five-year fixed rate 75% loan-to-value (LTV) remortgage deal, which has been reduced from 4.18% to 3.98%.

There is also a five-year fixed rate remortgage product available at 80% LTV, which has been reduced from 4.78% to 4.58%.

Both products come with no arrangement or valuation fees.

Damian Thompson, director of mortgages, Aldermore, commented: “We are committed to supporting a robust private rented sector that provides quality and choice to tenants across the UK.

“Landlords, no matter how big or small, play a significant role in today’s housing market so we believe it is our responsibility as a provider to ensure our products meet their needs and help them realise their ambitions.”

Company landlords submitting remortgage applications through its commercial portal will not just be able to access the same rates as individual landlords, but they will also be able apply for a new multi property limited edition five-year fixed rate remortgage product at 3.78% up to 75% LTV and a 4.38% deal available at 80% LTV.

Thompson added: “At Aldermore, we understand the recent changes to the buy-to-let market have presented new challenges, which is why we are constantly reviewing and improving our proposition to ensure landlords receive the financial support to assist the growth of the sector.”

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Tenants spend a third of their gross pay on rent

November 9, 2018

Tenants typically spend a third of their monthly salary before tax on rent, new figures show, but there are wide regional variations.

They currently pay an average of 33% of their gross salary to their landlord in the UK, when excluding London, according to the latest Landbay Rental Index.

Renters in the UK - excluding London - earning a typical monthly salary of £2,317, before tax, are paying out £769 a month for the average rental property in the UK.

But a closer look at the data revels that affordability is improving across the board, thanks to the fact that wage growth has outstripped rental growth in all regions of the UK.

In the year, average rental growth in the UK - excluding London - has increased by 1.25%, meaning tenants are paying £120 per year more. However, monthly gross pay has improved by £768 per year, leaving tenants £648 better off.

The index, powered by MIAC, reveals that the picture unsurprisingly varies across the country, with tenants in London paying as much as 61% of their gross salary on rent for the average rental property. For a one-bedroom property this drops to 47%.

Tenants in the South East of England and East of England also paid more of their gross salary on rent than the average across the UK, at an average of 42% and 38% respectively.

Regions with lowest proportion of money being spent on rent include the North East (25%), Yorkshire & Humberside (26%) and North West (27%).

John Goodall, CEO and founder of Landbay said: “Improved affordability is welcome news for renters. For tenants looking to save up for a house, the prospect of having more money in their pocket each month will help them get one step closer to owning their own home. Wage growth is continuing to improve across the UK so the outlook for tenants can only get better.

“Brokers can use this data to help clients to look for opportunities across the UK where higher wage growth will boost demand for properties.”

Landbay Rental Index, powered by MIAC: Countries (All Beds)

October 2018



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Landbay Rental Index, powered by MIAC: Regions (All Beds)

October 2018



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Landbay Rental Index, powered by MIAC: Countries by number of beds

October 2018

One bed

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Eng. Exc. London






























Northern Ireland












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Fixed BTL mortgage rates on the rise

November 8, 2018

Mortgage lenders have increased their fixed rate buy-to-let deals for landlords, according to Property Master.

The firm’s mortgage tracker, which follows a range of buy-to-let mortgages for an interest-only loan of £150,000, shows that average rates across all classes of two- and five-year fixed rate mortgages for landlords have increased over the past month.

By using algorithms to match the requirements of individual private landlords against the entire buy-to-let mortgage market, the online mortgage broker reports that the monthly cost of a two-year fixed rate £150,000 buy-to-let mortgage increased between £2 and £5 a month between 1 October and 1 November, depending on the landlord’s level of borrowing, with 50% loan-to-value (LTV) deals typically costing less than say a 75% LTV product.

Meanwhile, the research, which tracks deals from 18 lenders in the buy-to-let market, including Barclays, The Mortgage Works, and RBS, also reveals that the monthly cost for a five-year fixed buy-to-let mortgage rate is up by between £4 and £5 a month, depending on whether the borrower is taking out a 50%, 65% or 75% LTV mortgage product.

This is the first time rates and costs, which include product and application fees, have increased on a month-on-month basis, across all types of fixed rate loans tracked, since Property Master launched the report in January 2018.

Angus Stewart, chief executive, Property Master, commented: “Even though the Bank of England decided to hold the base rate this time around it does look as if buy-to-let fixed rates are beginning to trend up following the previous increase in the summer. Also, the bank reiterated its view that interest rates generally will need to go up further over the coming months.

“Private landlords will need to shop around to get the best deal, but they may find those good deals become over time more difficult to find.

“That said competition amongst buy-to-let lenders is still healthy and we are seeing new developments and deals coming out all the time. There are over 1,000 fixed rate mortgages on offer for landlords, so it is important landlords look for a broker that has the technology to really provide coverage across that increasingly broad waterfront.”

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BTL lending slumps to way below forecast

November 8, 2018

Buy-to-let lending for 2018 looks likely to fall well below its estimate of £12bn, as taxes and regulations continue to have an adverse impact on the buy-to-let market.

At the start of the year, UK Finance had predicted £12bn of buy-to-let lending for residential property acquisitions in 2018, but with tax changes eroding landlords’ returns fewer people are investing in the buy-to-let sector, and as a result Jackie Bennett, director of mortgages, estimates that lending will likely hit just £9bn this year.

Addressing delegates at UK Finance’s annual mortgage conference this week, Bennett said: “Our forecast for 2018 was for around £12bn of buy-to-let purchase – the market looks like it will considerably undershoot this, coming in at more around £9bn.

“This is undoubtedly the impact of various tax, regulatory and legislative changes that have happened to landlords in the buy-to-let sector.

“And with the 2018 tax bills dropping through landlords’ letterboxes, or more likely in their inboxes these days, we are yet to see what further impact this may have on the market.”

But while lending for new property purchases has come in at below expectations, buy-to-let remortgaging looks set to exceed initial forecasts.

According to UK Finance, lending is expected to reach £27bn, up from an estimate of £24bn at the start of the year.

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A ban on letting fees will have a ‘significant impact’ on the PRS in Wales

November 8, 2018

Landlords and letting agents could be banned from charging fees to private rental tenants in Wales under plans for a new law.

At the moment, tenants can be charged fees for a range of administrative reasons, including credit, reference and immigration checks or for an accompanied viewing.

But the Renting Homes (Fees etc.) (Wales) Bill, supported by AM’s from all parties, will prohibit all fees connected to granting, renewing or continuing a standard occupation contract except those explicitly permitted by the Bill.

Many landlords may not yet be familiar with standard occupation contracts, but they will replace assured shorthold tenancies when the Renting Homes (Wales) Act 2016 is commenced, probably in 2019.

The Renting Homes (Fees etc.) (Wales) Bill will list ‘permitted payments’, such as rent, and include powers to limit the levels of security and holding deposits, the latter of which will be limited to a week’s rent.  

However, many letting agents and landlords believe that the proposed new law will lead to increased rents and a potentially negative economic impact on the letting agency sector, including job losses.

Following a debate in Plenary on general principles yesterday, David Cox, ARLA Propertymark’s chief executive, commented: “A ban on fees will have a significant impact on the private rented sector. The Committee has listened on the issue of payments of utilities but further consideration is needed around charges for change of sharer and surrender of tenancy. 

“Furthermore, reference checks must be exempt as referencing is really important when you’re setting up a tenancy agreement and the risk is that without any means through which to cover the cost of this process, the most vulnerable tenants will find it very difficult to secure suitable rental accommodation.” 

Although the Committee supported the general principles of the Bill, its report does highlight issues of concern and makes a number of recommendations.  

Some of the concerns it highlights relate to the effectiveness of the enforcement provisions, including the level of financial penalties, and the need to ensure that where prohibited payments are taken, the Bill should make it as straightforward as possible for these to be repaid.  

The Committee also saw an important role for Rent Smart Wales in making implementation of the legislation effective.

Cox added: “The Committee’s report sheds light on a number of unintended consequences and the Welsh Assembly must now consider minimising the effects of the legislation on agents, landlords and tenants.

“We look forward to working with the Welsh Assembly on the Committee stages.”


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Landlord who ignored Improvement Notices is ordered to pay almost £3,000

November 8, 2018

Reading Borough Council has won a case against a buy-to-let landlord who allowed his tenants to live in unsafe conditions, despite official notices to make essential improvements to his property.

Reading Magistrates’ Court ordered Peter Steel of Little Sandhurst in Berkshire to pay a fine of £500 per offence as well as £1,941 legal costs and £50 victim surcharge, totalling £2,991.

The council decided to take action against Steel after members of its private sector housing team visited his two-bedroom flat in Hardwick Road, Tilehurst, which was let out.

During the visit, which took place in November 2016, they found that the flat was generally in a poor state of repair, with a light switch hanging off the wall in one bedroom, a living room window  that did not shut properly, while radiators in the living room and the kitchen were falling off their fittings. 

An initial letter to Steel with a schedule of works was ignored and a follow-up letter also received no response.

Following a further visit by the council, in which it was discovered that there was no hot water to the kitchen taps, Steel finally contacted the private sector housing team to say the work would be carried out.

However, a subsequent visit found that no action had been taken.

The council issued an Improvement Notice, but a further visit found none of the work had been undertaken, leaving the council with little alternative but to take legal action.

Steel was found guilty of breaching an improvement notice under Section 11 and breach of improvement notice under Section 12.

Cllr John Ennis, lead member for housing, said: “The landlord in this case was given ample opportunity to repair the faults in his property but failed to take any action

“Meanwhile, his tenant was living in poor, unsafe conditions and without hot water in the kitchen.

“It is unacceptable for landlords to let their properties fall into these levels of disrepair and I am pleased the council’s Private Sector Housing Team are there to fight on behalf of tenants in these situations.”

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October’s criteria searches shows fresh appetite for BTL investment opportunities

November 8, 2018

Knowledge Bank’s Criteria Activity Tracker for October suggests that property remains a popular investment option.

In terms of buy-to-let, two of the top three searches last month were for ‘first-time landlords’ and ‘first-time buyers’, so the appeal of rental property appears to be little diminished at least at the enquiry stage, even for those who have not yet got a first foot on the housing ladder.

The searches also reveal what is already starting to be seen as a trend where rental property is concerned. 

While new buyers may still be interested in entering the mainstream buy-to-let market, there appears to be a growing shift in the make-up of the rental market. 

The search for limited company buy-to-let moved up from third to second most searched for term in buy-to-let, while the top commercial lending search term was for commercial investment mortgages.

Lending to limited companies overseas was the top search in this category, all of which indicates that perhaps existing investors are looking to diversify their investment portfolio.

The research also revealed a growing demand for high loan-to-value (LTV) lending. 

Maximum LTVs was in the top five of almost every one of the eight different lending types that Knowledge Bank enables brokers to search on.

Nicola Firth, CEO of Knowledge Bank, said: “What these searches do highlight is an interesting snapshot into what the actual demand is.”

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Rents in central London rise as number of rental homes drops by 18% in a year

November 7, 2018

Renters in central London now face having to bid against each other, pushing rents up in the process, as a result of a sharp decline in supply owed to a jump in the number of buy-to-let landlords exiting the PRS in response to the government’s draconian tax changes, according to Knight Frank.

The company’s latest Prime Lettings Index suggests that many prospective renters are being squeezed from the centre of London and pushed into the suburbs as landlords offload expensive properties in the capital.

Using data from Rightmove, Knight Frank’s residential research division points out that the number of rental listings in prime central London has dropped by 18% in the year to September compared to the previous 12 months, placing upward pressure on rental values.

Knight Frank reports that average rental values increased by an average of 1.2% in September in response to falling levels of supply, prompted by landlords seeking to sell their properties in response to tax reforms, which included changes to capital gains tax relief rules in the Budget.

But while supply continues to fall, the number of new prospective tenants registering in prime central London has been on an upwards trajectory since the start of the year, suggesting that upwards pressure on rental values will be sustained.

With fewer properties available to rent in prime central London, the number of tenancies agreed per Knight Frank office in prime outer London rose by 16.7% in the year to September compared to the previous 12 months.

While total annual returns in prime London markets have declined, residential property has outperformed other asset classes in 2018.

Gold dropped 4.4% in the year to October while the FTSE 100 fell 5% over the same period. Global stock markets have declined in recent weeks over concerns about trade tensions.

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Increasing the ‘financial burden’ faced by landlords is ‘bad news’ for the PRS

November 7, 2018

This week’s announcement that landlords will need to pay the first £3,500 to make improvements to their properties to ensure they are minimum EPC rated E or higher has been criticised by ARLA Propertymark.

Under the Energy Act 2011, the government pledged to avoid any ‘upfront costs’ for landlords, but this principle has been disregarded by setting the cap as high as £3,500, according to the professional body for letting agents

David Cox, chief executive, ARLA Propertymark, described the new cap as “bad news for the private rented sector”.

He commented: “Over the last few years, the financial burdens faced by landlords have increased time after time, which is pushing rent costs up and driving buy-to-let investors out of the market.”

Cox is now calling on the government to show its support for landlords by reintroducing the Landlords’ Energy Saving Allowance (LESA) and extending it to include anything contained within the ‘recommendations report’ of an EPC.

But the Chartered Institute of Environmental Health (CIEH) disagrees with ARLA Propertymark, and all those who feel that landlords are being treated harshly when it comes to improving energy efficiency, describing the measures proposed by the government as ‘underwhelming’.

Although landlords who own some of the coldest privately rented homes have been required to improve these properties with energy efficiency measures since last April, the CIEH claims that many landlords have been able to ‘get away with doing nothing to improve energy efficiency’, due to what it sees as a ‘loophole’ in the legislation.

It points out that the private rented sector has the highest proportion of properties which are in Bands F and G for energy efficiency, and also the highest level of fuel poverty - 19.4% compared to 7.7% in owner occupied properties.

In 2017, CIEH, along with 15 other organisations, wrote to Claire Perry, energy and clean growth minister, asking her to amend the regulations to remove the “no cost” exemption from the regulations, where support is available to cover the cost of making energy efficiency improvements.

Responding to the consultation, Perry this week announced that landlords will be able to register for an exemption if upgrades will cost more than £3,500. But the CIEH says that this figure falls short of sector expectations.

Tamara Sandoul, policy manager at CIEH, said: “We are disappointed that the government didn’t set the cost cap higher.

“Whilst the response is still an improvement, the vast majority of tenants living in cold homes won’t be able to benefit from this minimum standard.

“The government’s own analysis shows that a staggering 50% of properties in Bands F and G won’t be brought up to a Band E with this new cost cap. That’s around 151,000 homes missing out on the benefits of having a warmer home that is cheaper to run. This also raises serious doubts over the government’s ambition to bring all property up to a Band C by 2030.

“We are also very concerned that third party finance for improvement such as Green Deal and local authority funding is to be counted as part of the landlord’s overall cost cap. Many of these funding sources take into account the financial circumstances of the tenant, however, the improvement will ultimately benefit the landlord.

“We urge the government to look at this again and work to make further improvements in their approach to tackling cold homes and fuel poverty.”

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Employers face huge staff shortages as workers ‘priced out of housing market’

November 7, 2018

The increase of London Living Wage to £10.55 per hour and UK Living Wage to £9 per hour has been welcomed by the GMB, but this is still no way near enough to enable a high number of people working in London to actually live in the capital, according to the trade union.

The figure, independently calculated by the Living Wage Foundation, and announced on Monday by the Mayor of London Sadiq Khan, is based on what people need to live in London, and has risen by 35p from £10.20 per hour.

However, while earnings have increased, the rate of growth remains significantly lower than the price of renting property in London.

According to the GMB, the average rent for a two-bedroom property in the capital has soared by 21% to £1,450 since 2011.

Warren Kenny, the GMB’s London regional secretary, said: “Last week GMB London showed that rents on two bedroom flats in London have risen by 21.7% since 2011 with the median rent standing at £1,450 a month.”

In 14 of 33 London boroughs, rent on a two-bedroom property jumped by more than 30% over the same period.

Greenwich experienced a 50% increase in rents for the same type of property to an average of £1,350 a month – the biggest rise in London, while local wages have failed to keep pace.

The GMB study found that the average rent for a two-bedroom flat in Kensington and Chelsea is now £2,708 per month, making it the most expensive area in 33 London boroughs for rents for private sector two-bedroom flats. Rents in the area have risen 8.7% since 2011 but have decreased by 10.7% in the past 12 months. 

There are two other areas in London where the average monthly rent for a private two-bedroom flat is more than £2,000. These are Westminster at £2,708 and City of London £2,297.

The lowest average monthly rent for a private two-bedroom flat at £1,025 is in Bexley. The increase since 2011 has been 28.9%, but that has not changed over the last 12 months.

Kenny commented: “These high rents are here to stay. So too are younger workers living for longer in private sector rental accommodation. 

“As a direct consequence, employers must be prepared to pay much higher wages to staff to enable them to afford these much higher rents. 

“If employers don't respond with higher pay they will face staff shortages as workers, especially younger people, are priced out of housing market.”

Kenny blamed policy mistakes for making the housing position for lower paid workers worse.

He added: “Council homes for rents at reasonable levels were aimed at housing the families of workers in the lower pay grades and did it successfully for generations.

“These were sold off, but crucially not replaced as a matter of Tory dogma. Housing benefits was introduced instead to help pay rents for those on lower paid and the costs to the taxpayer has ballooned to over £24bn a year. It would have been far cheaper to build the council homes. 

“The chickens are now coming home to roost on these policy mistakes. There is a massive shortage of homes for rent at reasonable rents for workers in the lower pay grades. There is now no alternative to higher pay to pay these higher rents plus a step change upwards in building homes for rent at reasonable rents.”

The figures for all 33 boroughs in London are set out in the table below: 



2018* Two-bedroom monthly median rent

% change in rent 2011**-2018

% change in rent 2017***-2018














Kensington and Chelsea










City of London















Hammersmith and Fulham





Tower Hamlets

























Richmond upon Thames













































Kingston upon Thames





Waltham Forest

























Barking and Dagenham



































* monthly rents recorded between 1 April 2017 and 31 March 2018


** monthly rents recorded over the 12 months to the end of June 2011


*** monthly rents recorded between 1 April 2016 and 31 March 2017



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Energy efficiency rules disadvantage landlords investing in rural homes

November 7, 2018

Landlords investing in the rural private rented sector face higher costs and fewer options to meet new requirements of minimum energy efficiency standards, according to the CLA, whose members provide around 40% of all private rented housing in the countryside.

Up to 200,000 landlords will face bills of up to £3,500 to upgrade homes that are energy inefficient from next year, under regulations announced by the government on Monday.

Rented properties in England and Wales with an Energy Performance Certificate (EPC) of F or G - representing about 6% of the domestic market - will have to be improved by landlords before they can be put on the market, under the new measures.

But the CLA claims that rural areas are hit hardest by these regulations because properties not connected to the gas network are automatically scored lower for using alternative fuels.

CLA President Tim Breitmeyer said: “Since the Green Deal ended in 2015, the industry has been in an uncertain position waiting to understand what steps a landlord must take to comply.

“Landlords are still in limbo because despite these regulations coming into force almost seven months ago, the government must still find time in a packed parliamentary timetable to implement the changes, so the uncertainty looks set to continue.

“We want to encourage better investment in the rural private rented sector to provide safe, warm homes. The majority of our members have already taken steps to ensure their properties comply with these energy efficient requirements, and in many cases, have invested far greater amounts than the £3,500 cap.

“However, around four million properties are off the grid and rely on fuel which is more expensive than gas. This automatically results in a lower score than their urban counterparts, which increases the costs of compliance. Removing fuel price from how properties are judged would help to address this issue.”

Breitmeyer added: “Some landlords with properties in more scenic parts of the country could decide it is simply not viable to make the upgrade and either sell or let as holiday accommodation.”

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BTL landlord hit with £21k fine for safety failings

November 7, 2018

A private landlord from St Helens has been ordered to pay £21,000 after a prosecution by the local council found a number of fire safety risks that she failed to address at a property in Collins Green which is occupied by family.

The court ruled that the landlord was putting her tenants at risk by failing to carry out the required improvements, which fall under the Housing Act 2004.

Repairs to the property were required to rectify a number of health and safety issues, including dangerous electrics and damp. The landlord also failed to comply with a smoke alarm notice.

As a result Warrington Council attended the property to fit the alarms and has issued the landlord with a fixed penalty fine of £1,000.

Cllr Maureen McLaughlin, Warrington Council’s executive board member for public health, commented: “We are sending out a clear message to bad landlords that failing to ensure your properties are safe and healthy for your tenants will not be tolerated.

“We want to protect all of Warrington’s tenants from poor housing conditions, and we are working closely with landlords to achieve this.

"While the vast majority of them want to work with us, we will continue to use all the powers available to us to take action against those who fail to co-operate.”

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More landlords to be forced to improve energy efficiency of their properties

November 6, 2018

More landlords of the draughtiest homes in England and Wales will be required to upgrade their properties after amendments to regulations requiring landlords to install energy efficiency measures was announced by the government yesterday.

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

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

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

The government previously proposed that landlords who faced costs exceeding £2,500 for putting in new insulation and other measures would be exempt from making the upgrades.

However, the government announced yesterday that it is lifting the cap to £3,500, meaning fewer owners would be exempt.

The changes mean that next year properties with an EPC rating of F or G, the lowest two ratings available, must be made warmer by landlords before they can be put on the rental market for new tenancies.

This is expected to cost £1,200 on average, according to the government.

These changes are expected to save households an average of £180 a year while reducing carbon emissions.

Energy minister Claire Perry said: “While the vast majority of landlords take great pride in the properties they own, a minority still rent out housing that is difficult to keep warm.

“Upgrading these homes so they are more energy efficient is one of the most effective ways to tackle fuel poverty and help bring down bills for their tenants, saving them £180 a year.

“Everyone should be protected against the cold in their own home and today’s announcement will bring this reality closer.”

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Strong demand pushes up rents in Scotland

November 6, 2018

Average rents in Scotland continued their upward trend in the third quarter of the year on the back of strong demand from renters, the latest Citylets report shows.

The Scottish property portal reports that average rents in Scotland ended Q3 2018 at an average of £789 per month, up 2.2% compared with the same period last year.

Continued demand for properties of all sizes pushed rents higher with four-bedroom properties, as per previous two quarters of 2018, recording the steepest annual growth at 5.5%.

Thomas Ashdown, managing director of Citylets, said: “Strong demand for rented accommodation in Scotland continued in Q3 2018, most notably in the central belt where both Edinburgh and Glasgow experienced rental growth in excess of recent quarters.

“The continued shift in demographic towards families renting appears evident in the uplift in rents achieved for larger properties.”


Once again rents in Edinburgh rose during Q3 2018 bringing the market to yet another all time high, now at £1,107 per month on average, up 5.6% year-on-year.

All property sizes recorded strong annual growth with four-bedroom properties rising fastest over the year at 10.8%, in part likely to reflect the continued strong demand for family rental accommodation.

Of concern to tenants will be the uptick in the rate of growth for Edinburgh back to the 5-6% range after lying in the 3-4% range for around a year prior to Q2 2018.

It is the 36th consecutive quarterly recording of annualized rental growth for the capital.

TTLs remain very low in Edinburgh with 76% of all properties to rent in Edinburgh let within a month.


Glasgow, for so long the bastion of rental stability in Scotland with consistent and low annual growth, posted an unexpected and sharp rise in average rents of 4.9% Y-O-Y.

Rental properties in Glasgow, on average, now rent at £785 per month and let in just 24 days.

It is unclear why all markets saw large annualized growth over and above what would naturally be expected in the traditionally busiest period of the year.

Consequently, the gap between Scotland’s largest and the granite cities has opened up with a material gap now emerging between them.

It will be interesting to view figures at the end of Q4 to conclude whether a new city dynamic has emerged.


Aberdeen landlords can remain cautiously optimistic that their market may soon level off completely and, with the price of oil having been on an upward trend for nearly three full years, may well start to return to positive growth.

Rental growth as at Q3 2018 was just minus 3.6% with one-bedroom properties posting minus 2.7% growth for the second consecutive quarter.

Of material interest will be the reduction in average TTLs, down 4 days on the previous year to 45. 42% of properties to lease in Aberdeen let within a month, up from 37% in Q3 of 2017.

Dundee/West Lothian/South Lanarkshire/Renfrewshire

Dundee also experienced a rise in the annual growth rate for its rental market, up 3.4% to average £604 per month.

Strong demand for large family and student homes led the rises at 11% and 7.9% respectively.

Nearly half - 48% - of properties to rent in Dundee, let within a month, up significantly on recent quarters.

West Lothian rental market has again posted strong annual growth, up 4.8% to £697 per month, with a significant reduction in TTL of nine days.

Growth in South Lanarkshire continued for the fourth consecutive quarter, albeit easing to 1.9% from 3.8% last quarter.

Reflecting on the Scottish Market, Adrian Sangster of Aberdein Considine, said: “In the north of Scotland we are continuing to experience a market where stock is not an issue, whilst in the south there is insufficient availability of properties to meet tenant demand.

“This is resulting in the almost evitable increase of rent values in the south compared to the continued reduction in the north, albeit at a much slower pace.

“Whilst there are some encouraging sounds from the oil industry with several new projects being announced I do not anticipate it making too much of an impact in the north in the short to medium term. However whilst the country’s legislators seem hell bent on discouraging landlords to remain in the sector I can only see the rental trends in the south continuing unabated.”

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Rents set to rise by 13.7% by 2023

November 6, 2018

A shortage of housing supply will push up rents up by an average of 13.7% over the next five years, according to Savills.

The estate agency suggests that the lack of properties on the market is a sign of the growing number of buy-to-let landlords exiting the rental market due to more stringent tax rules.

Tightening access to mortgage finance and limited social housing supply will continue to fuel demand for privately rented homes at all price points. 

This is particularly true in London, where Savills forecasts rents will rise by 15.9% over the same period. 

But while tenant demand remains strong, buy-to-let buyer numbers will almost certainly continue to come under pressure, adding to the widening supply-demand imbalance in the market.

Savills predicts that mortgaged buy-to-let purchases will drop by almost a quarter - 23% - by the end of 2023. 

“This will add to upwards pressure on rents, particularly in London, as investors look to lower value, higher yielding markets,” said Lucian Cook, head of residential research at Savills.

The firm also projects that home purchase prices will increase by an average of 14.8%, ranging from 21.6% in the North West to single digit growth in London and the South. 

Values in the capital’s prime market will perform much more strongly, given price adjustments already seen in the capital since 2014.

But transactions, rather than house prices, are often seen as the ultimate measure of market strength, according to Cook.

He added: Sales volumes have fallen only -6.9% since the Brexit vote to 1.145 million, demonstrating the resilience of the UK housing market.”

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Paragon extends BTL range for expat landlords and holiday lets

November 6, 2018

Paragon has added to its buy-to-let mortgage range to include mortgages for expat landlords with rental property in the UK and for UK holiday lets, which both represent growing segments of the UK buy-to-let mortgage market.

Mortgages for expat landlords are available at loan to value (LTV) ratios up to 70% for loan amounts up to a maximum of £750,000 and at up to 65% LTV for loan amounts up to a maximum of £1m.

Mortgages for holiday lets are available up to a 70% LTV for loan amounts up to a maximum of £500,000.

Paragon’s expat mortgages, available via mortgage intermediaries for individual and limited company landlords with single, self-contained units, can be used by landlords based in over 30 countries to finance property in the UK.

Landlords must hold a current UK passport, have held a UK bank account for at least three years and use a managing agent.

Paragon’s holiday let mortgages, also available through mortgage intermediaries, can be assessed on Assured Shorthold Tenancy (AST) rental income or proven, historic holiday let income.

Visit Britain recorded a 6% increase in domestic overnight holiday trips to 59.1 million in 2017, while international holiday visits to the UK also increased 11% to 15.4 million, thanks in part to good summer weather and a weaker pound.

John Heron, managing director of mortgages at Paragon, said: “We are really pleased with these product changes and hope that they will be received well by our intermediary partners.

“We have looked very carefully at the customer journey for expat buy-to-let landlords and have identified a number of areas where we think it can be simplified and improved.

“Similarly, with our holiday let criteria we are recognising how landlord strategies can change in the face of a more fluid rental market.”

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Eight men found crammed in one-bedroom flat

November 6, 2018

Eight men were found living in cramped conditions in a one-bedroom flat in east London during a raid by Barking and Dagenham Council’s enforcement team.

The officers discovered that the one-bedroom flat had been illegally converted into four hazardous bedsits that were in need of repair.

Although the one-bedroom flat had a license, in accordance with the rules set by Barking and Dagenham Council, there was not consent for four separate bedsits, each of which had electrical and fire safety faults.

The landlord will now be investigated, and if found guilty, will face a fine and a potential ban on letting properties in the borough.

Cllr Margaret Mullane, cabinet member for community safety, said: “We want to make sure that all housing in our borough is of a good quality and safe standard.

“If you are breaking the rules, it isn’t a matter of if we catch you, it is a matter of when.”

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Tenant Fees Bill reaches the committee stage in the House of Lords today

November 5, 2018

Tenant Fees Bill that will ban most charges set by landlords and letting agents to tenants in England will continue its journey through the House of Lords today.

The Bill, introduced into Parliament in May of this year, is now at an advanced stage in the upper chamber, and will reach the committee stage in the House of Lords this afternoon.

The Bill will be scrutinised at the Lords grand committee, from 3.30pm today, as part of the process of introducing a ban on letting fees and the majority of other upfront fees payable by tenants to rent a property in England.

The proposed new law will also lead to a cap on the amount of refundable security deposit a tenant would be required to pay to the value of six weeks’ rent and cap the amount of holding deposit a tenant could be required to put down to secure a property to the value of one week’s rent.

The Tenants’ Fees Bill had its Second Reading in the House of Lords on October 10.

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

The Bill would place a duty on trading standards authorities and district councils to impose new penalties on any landlord or letting agent found to be in contravention of them. These include a fine of £5,000 for a first breach, which would typically be viewed as a civil offence.

A further breach within five years, however, would be viewed as a criminal offence, and subject to an unlimited fine and a banning order offence under the Housing and Planning Act 2016.

PropTech company Goodlord has raised concerns that the abolition of fees will result in rising rent levels, particularly in the poorest areas of the country.

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Ban of letting fees will see tenants living in poorest areas pay more – claim

November 5, 2018

Tenants living in some of the most deprived areas in England will face some of the steepest rent price hikes in the country, according to new research by a leading PropTech company. 

Goodlord analysed 30,000 tenancies processed through its software platform for letting agents so far this year to assess the impact the proposed Tenant Fees Bill might have on tenants, and whether it could deliver on its objective of helping renters across England.

The study found that tenants moving home are required to have on average £3,039 available per property.

This includes the first month’s rent, at an average of £1,092, security deposit at £1,442, tenant fees of £209 and a refundable holding deposit of £296.

According to Goodlord, tenants in London needed the highest amount upfront per property at £4,347, whereas areas outside of London required tenants to pay on average £2,324.

Next year, tenants will no longer be required to pay the average £209 in fees for any administration tasks letting agents carry out to facilitate their move as part of the proposed bill. But tenants will still face normal annual rent increases of approximately 1.7%, meaning the average rent will likely increase to £1,111 per month.

If the Bill is passed, the average maximum security deposit could be £1,534 and refundable holding deposit £256.

This means the total potential amount of money a tenant would need to move home in 2019 would be £2,942 - only £97 less than in 2018.

Based on the research, Goodlord found London tenants could save the most - an average of £183 per property while tenants in the north of the country could pay an extra £100. 

But given that many letting agents plan to recover lost income from tenant fees, most probably in the form of higher rents to cover these losses, Goodlord warns that any savings from the bill could be negated, especially in the less affluent areas of the country.

Goodlord COO Tom Mundy said: “Our industry needs regulation that doesn’t penalise good letting agents, promotes sustainable rents for tenants and gives landlords peace of mind.

“Current government legislation is making it harder for this to be the case and in some cases the proposed tenant fee ban is making it even more costly for the people it’s trying to protect.”

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New measures are “another nail in the coffin for buy-to-let”

November 5, 2018

Buy-to-let is a lot tougher than it once was. Landlords’ returns have been squeezed by the introduction of the 3% stamp duty surcharge and the phasing out of mortgage interest relief.

However, for many people the idea of investing in property continues to appeal, despite the barriers thrown in the way of landlords.

But the government still seems intent on slowing the buy-to-let market, illustrated by the latest measures announced in last week’s Budget. 

The statement delivered another tax hit for landlords, which will undoubtedly result in higher tax bills for many buy-to-let investors, including ‘accidental landlords’.

Based on the government’s own scenario, The Guardian estimates that someone selling a property they once lived in, but then rented out for a while, could typically end up more than £13,000 worse off than under the existing rules, as a result of two changes announced by the Chancellor last Monday.

Philip Hammond unveiled that lettings relief, which currently provides up to £40,000 of relief (£80,000 for a couple) to people who let out a property that is, or has been in the past, their main home, will, from April 2020, only apply where the owner is sharing occupancy of the home with a tenant – effectively scrapping this benefit.

The other change relates to capital gains tax (CGT), and in particular the ‘chargeable gain’, which is your gain, minus any private residence relief (PRR) you may be eligible for.

Currently, landlords do not pay any CGT for the years they lived in the property, plus an additional exemption for the final 18 months that they owned it. But this final period exemption will now be reduced to nine months.

Ian Dyall at financial planning firm Tilney described the tax change as “another nail in the coffin for buy-to-let”.

Meanwhile, Sam Mitchell at online estate agent Housesimple believes that many people who rented out their previous home and has equity locked up in that property will now be thinking “it’s best to sell sooner rather than later if they want to avoid a massive capital gains bill further down the line”.

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Council threatened with a judicial review over ‘unlawful’ licensing plan

November 5, 2018

The Residential Landlords Association (RLA) has threatened Great Yarmouth Borough Council with a judicial review over ‘unlawful’ licensing plan because it has serious concerns over its selective licensing plans.

The local authority plans to bring rented homes in parts of the Nelson electoral ward into the scope of selective licensing, with fees set at more than £500 per property for the five-year licensing period, plus a monthly fee of £9.50 to be paid to the landlord support scheme.

But the RLA believes one of the conditions set to be imposed as part of the scheme is unlawful and has written to the council asking for urgent clarification.

Great Yarmouth Borough Council’s proposal to make it compulsory for landlords affected to join a ‘landlord support service’ run by a third-party delivery partner is potentially unlawful, according to RLA.

Some councils’, such as Doncaster and West Lindsey, use delivery partners to administer and enforce schemes, but these do not require landlords to become members of the partner organisation as a pre-condition of licensing, and the RLA believes the council has no power to impose such a condition

RLA policy director David Smith said: “We are asking for immediate clarification on the council’s position.

“If our understanding is correct we want the council to reconsider this aspect of the scheme and come up with a lawful alternative.

“If it will not we will move ahead and issue a claim for a judicial review on this basis.”

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£20m ‘Ponzi’ property scheme shut down

November 5, 2018

The High Court has shut down a Ponzi scheme operated by a property investment firm after ruling that it was misusing close to £20m of investors’ money.

Having been incorporated more than 13 years ago, Essex and London Properties Limited (ELP), which has a registered office in Sidcup, Kent, claimed to acquire properties with the intention of selling them on at a profit or getting rental income for investors.

A number of investors, many of which were approached directly or via intermediary platforms, were enticed to invest by offers of an 8% annual return paid quarterly if the money was held for three years or 12% if the money was held for one year.

Over an 18-month period, more than 800 people invested in the company anywhere between £5,000 to over £100,000, with Essex Police, which has an ongoing investigation, calculating that to date, £18.9m has been obtained from creditors and investors.

It transpires that ELP only bought a single property; a house in Harwich for £147,000, which is less than 1% of the overall amount of money collected from investors.

Despite acquiring just one property, the company gave information to investors claiming it had acquired several properties that had rapidly increased in value and falsified Land Registry documents showing the company owned more property than it did.

Investors made payments through a number of escrow agencies. Insolvency Service investigators examined the income and expenditure of statements made by one of these agencies and found that existing investors received their interest payments, not from any meaningful return on their investment but from payments made by new investors. The company was in essence operating a Ponzi scheme.

As a result of the investigation by Company Investigations of the Insolvency Service, the Secretary of State for Business Energy and Industrial Strategy issued the petition to wind up the company.

The High Court heard the petition against the company which was unopposed and ordered the company into liquidation.

During the investigation, investors were approached by various recovery room businesses offering to recover the amounts, possibly in excess of the initial sums invested, in exchange of an advance fee. One business falsely claimed to be authorised by the chief executive of the Insolvency Service.

In January 2018, the company placed itself into voluntary liquidation, claiming to have debts of over £11m. The creditors, comprised mainly of the investors in the company, initially approved of the liquidation but later supported the Secretary of State’s petition.

Judge Barber as part of her judgement said that on the evidence, this was a case “crying out for a public interest winding up”.

David Hill, chief investigator for the Insolvency Service, said: “The company persuaded members of the public to part with substantial sums of money to invest in property. Only one property was purchased and the money raised from the public in reality was used to benefit those running the company.

“As so often is the case, if an investment scheme appears to be too good to be true, it probably is. There is an ongoing investigation into those individuals controlling Essex and London Properties Limited by Essex Police, who are liaising with the Crown Prosecution Service with a view to prosecuting a number of suspects.”

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New partnership provides out-of-hours repairs services to tenants

November 2, 2018

AXA Partners and property repairs reporting service Fixflo have joined forces to offer a new emergency and out-of-hours repairs service to tenants across the UK.

With AXA Partners acting as the emergency out-of-hours contact centre for tenants using Fixflo, offering a call-back service within 60 minutes of reporting an issue, tenants living in privately rented accommodation can instantly report the need for a repair in their homes, rather than wait until normal working hours.

The service, designed to remove the stress and financial burden of out-of-hours repairs for both tenants and landlords, is initially being offered by Manchester-based Thornley Groves lettings agents, but will be rolled out on a wider regional and national scale later this year.

Data from Fixflo shows that more than 8,000 issues were reported in properties in Manchester in the last 12 months, with over half classed as emergencies. Almost 3,000 of these problems occurred out-of-hours, leaving many tenants waiting for whole weekends before a repair could be made.

Jason Watkin, CEO at Thornley Groves, said: “The lettings industry has faced a real challenge in overcoming the lack of options that tenants have when trying to report an emergency repair in their home outside of normal business hours. 

“From 5pm daily and over weekends, they are left to source their own repair services, which can often be quite distressing for the tenant when it comes to finding a reputable repairs service and deciding who is responsible for paying for it. We wanted to change that.” 

According to Fixflo, water leaks were the most common repair reported over the last year at an average cost of £164. Boiler heating issues were the second most likely problem for tenants costing £245 on average.

Watkin added: “By working with Fixflo and AXA Partners, our tenants can easily report an issue via Fixflo’s online dashboard 24 hours a day, seven days a week. 

“The service gives them peace of mind that their problems will be fixed regardless of the time of day, and also means that both they and their landlords can rest assured that repairs will be carried out promptly by a trusted, AXA-vetted contractor.”


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BTL landlord uses bridging finance to add to portfolio

November 2, 2018

With many landlords finding it harder to secure a mortgage since the Prudential Regulation Authority’s changes were introduced last year, some buy-to-let investors are turning to less conventional forms of finance in order to carry on investing in the buy-to-let market, especially when buying property under the hammer.

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 with property investors, including landlords looking to add to their portfolios.

The speed at which bridging finance can be implemented is the main reason for its use, according to Shawbrook Commercial Mortgages.

Shawbrook, with its broker partner Baya Financial, has just launched a ‘Lending for Refurbishment Costs’ product offering borrowers access to 100% of refurbishment costs on short-term projects, which one BTL landlords has already taken advantage of.

The investor recently bought a property at auction for £494,000, which required freeholder consent and a lease extension.

In addition, works were also required, at an estimated £49,400, to allow internal reconfiguration of the rooms, moving the kitchen and bathroom to the ground floor, along with loft insulation, new flooring and decoration.

The investor successfully secured the funds through Shawbrook within 28 days, enabling him to move forward with the deal, at a rate of 0.8% a month.  

Unlike many providers, the 1.95% arrangement fee for this product was added to the loan which placed the customer at 86.95% loan-to-value (LTV) on completion.

Funds for the works were released immediately and allowed the investor to carry out the necessary works in time to secure a monthly rental income of £1,600 and add this property, now with a GDV of £650,000, to a growing portfolio.

In addition to borrowing 75% against the lower of day one purchase price or value, Shawbrook’s Lending for Refurbishment Costs option allows applicants to borrow up to 100% of the refurbishment costs on a single larger facility for light refurbishment projects across residential and semi-commercial security.

In this case, all funds were provided on day one with no staged drawdown required. In this instance, a larger gross loan of £429,533 allowed the borrower to both purchase the property and complete the refurbishment project.

Gavin Seaholme, head of sales at Shawbrook Commercial Mortgages, said: “This new short-term product addition is rapidly becoming a key string to the experienced property investors bow, allowing them to generate value and build their portfolio.

“We are delighted to expand access to this product feature across the entire Shawbrook Broker panel and look forward to seeing this help investors with their short term property ambitions.”

Eleanor Broadhurst from Baya Financial added: “We have worked with Shawbrook for many years and have always liked their way of operating; they understand how investors work which is key to us as a broker. 

“We were really excited to see that they had this new product and were keen to offer this new and innovative solution to our clients, allowing them to access more borrowing in order to build and grow. We have been really pleased as it is as easy to use as their other products.”

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‘Pent-up’ demand continues to give landlords in London the upper hand

November 2, 2018

Rents in London’s prime property market have increased further, rising by 1.1% in the 12 months to September, as more people look to rent rather than buy property in the heart of the capital amid Brexit uncertainly, new figures show.

According to Knight Frank’s latest prime London lettings report, demand for rental property is outstripping supply, owed in part to the fact that more landlords are looking to offload properties due to a succession of tax changes, such as the phasing out of mortgage interest relief.  

Punitive tax changes for landlords means an increasing number have either sold or listed their property for sale. This, in turn, has resulted in a decline in supply and put upwards pressure on rental values.

Separate data from Rightmove reveals that there were 7% fewer new lettings listings in prime central London in the year to September 2018 compared with 12 months earlier. The equivalent decline was 10% in prime outer London. As a result, annual rental value growth has returned to prime central London and the annual declines in prime outer London are moderating.

While average rents in prime central London grew 1.1% in the year to September, the annual change in prime outer London dropped by 1%, which was the most modest rate of decline in two and a half years.

Knight Frank suggests that a reform to tenant fees is one recent change that may exacerbate this trend. The firm believes that the change, which is likely to be introduced next year, could prompt more landlords to review their portfolios amid increased administrative charges.

Despite declining levels of supply and the uncertain political backdrop, Knight Frank agreed 6% more new tenancies in the year to September 2018 than the previous year.

The total annual return in prime central London, a figure that takes the gross initial yield and annual capital value growth into account, was 0.3% in September.

While this is lower than some previous years, it is stronger than other asset classes. The price of gold and the FTSE 100 fell by more than 5% in the year to mid-October.

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New property management service targets new business from landlords

November 2, 2018

MyHomeGroup has launched a new property management service aimed at landlords looking for an alternative to what it says are the ‘high fees’ charged by traditional lettings agents.

Unlike the fee structure of many other property management services, the new business,, will offer its landlord customers a VAT inclusive fixed fee of 6%. offers an array of services to landlords, including listings on Rightmove, Zoopla, PrimeLocation, professional photography and floorplans, a dedicated account manager, inventory and check-in, legal protection including a full reference report of tenants, an Assured Shorthold Tenancy Agreement, Tenancy Deposit Scheme, Section 21 Compliant and Eviction Legal Assistance, rent collection and rent guarantee insurance, 24/7 problem reporting and repairs, and monthly report.

Will Clark, managing director of My Home Group, commented: “Traditional estate agents are pocketing thousands in astronomical fees from landlords who need a property management service and until recently have been left with no choice but to opt for the high street.

“We offer landlords another option with massive cost savings. Using a mix of tech and a hub of dedicated ARLA qualified account managers, we provide landlords with round the clock property management at a fixed, upfront fee of 6 percent - a fraction of the fees charged by traditional agents. 

“What’s more, in order to address the sheer lack of transparency in property management fees amongst traditional and online agents, we are deliberately charging users one fixed upfront fee.  There are no extras - hidden or otherwise - and we don’t pocket additional commission when we invoice our customers after any repair work to the property - another trick traditional agents use to make even more money from their landlords. 

“At a time when landlords are being squeezed left, right and centre, they now have the choice to guarantee thousands of pounds worth of savings every year by switching agents.”

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Hinckley & Rugby scraps maximum age limit

November 2, 2018

Hinckley & Rugby Building Society has removed all upper age restrictions across its entire mortgage range, including buy-to-let products.

Hinkley & Rugby’s maximum lending age was 75 at term end, but the lender has decided that cases from older borrowers, including those with experience of investing in the BTL sector, offer no more risk than younger ones.

Carolyn Thornley-Yates, head of sales and marketing at Hinckley & Rugby, said: “From talking to brokers every day we have become increasingly aware of the opportunity for a common sense, manual lender to look in depth at cases where the borrower would be 75-plus at term-end.

“People are living longer, working later and, in increasing numbers, wanting to finance a mortgage into part-time employment and their retirement.

“There is a combination of house value, income, loan to value and other circumstances where lending into a borrower’s 80s and 90s is affordable.”

Thornley-Yates says that having  six highly experienced senior members of its mortgage referrals committee available daily to consider such cases means Hinckley & Rugby can look at the individual circumstances in the round and where it can lend, it will lend.

She added: “Until now, we were constrained by our maximum age limit. Removing this completely better reflects how society is changing and gives brokers and their customers the message that you are never too old to explore your mortgage options with Hinckley & Rugby.”

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Fresh calls for restrictions on Airbnb-style rentals to tackle housing shortage

November 1, 2018

There have been fresh calls for new restrictions on Airbnb and other short-term letting websites in this country, just days after the government in Ireland announced plans to introduce a new set of laws to address short-term lettings promoted by the home-sharing company.

The Irish government is proposing regulations to Airbnb, which come into play in June next year. The regulations aim to avert landlords from favouring short-term rental agreements and to keep their rentals on the long-term housing market.

Ireland’s Department of Housing said in a statement: “The purpose of these changes to the planning code is primarily to address the longer-term rental issues arising from the use of properties for short-term letting.

“This is an unregulated activity, it is not homesharing as it is typically understood, and in a time of housing shortage it is unacceptable that rental homes would be withdrawn from the letting market, particularly in our cities and large towns where rents are high and supply is still constrained.”

Berlin, Barcelona, and Paris have all passed measures to regulate similar issues. However, the UK hasn’t, and that is something that needs to change, according to Newcastle City Council.

The council is concerned that far too many properties are being rented out on short-lets in Newcastle, mainly through Airbnb.

The home-sharing website operates a 90-day limit on the number of days a property can be used as an Airbnb in London, but there were no such restrictions outside the capital.

A meeting of Newcastle City Council's planning committee heard restrictions would stop homes being constantly rented out to tourists - including hen and stag parties.

Kath Lawless, Newcastle City Council’s assistant director of planning, said there was “a need nationally to look at this issue” as the council was “constrained” by government legislation.

Neil Cobbold, chief operating officer of PayProp UK, is among those who are surprised that the Chancellor Philip Hammond did not announce a more stringent clampdown on short-term lets in his Budget statement this week.

Although this sector provides a great boost to the economy, Cobbold was keen to point out that it also affects the fortunes of the lettings sector, and that is why he feels it is the “right time for initial regulation”.

He said: “There has to be an equal tax footing for conventional landlords and those looking to let their homes on a short-term basis, and the proposal for limited tax relief on properties where the owner is in shared occupancy with the tenant marks the very first step towards achieving that.

“Over the next decade, it is likely that the short-term lets market will continue to expand, so it will be interesting to see if the government takes a similar regulatory approach as it has done with standard lets in the private rented sector.”

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New platform allows for careful management of a property portfolio

November 1, 2018

Building and managing a property portfolio can be daunting, but Arthur Online claims that it has made property management simpler by integrating with Advanced Tenant Referencing and Signable.

The cloud-based property management platform’s app or desktop platform allows the tenant onboarding process to be managed from end-to-end, enabling the tenant reference check to be completed swiftly and securely, and paper-free. Your prospective tenant can even sign all documentsvia theapp.

Arthur Online’s integration with AdvancedRent, allows for efficient management by allowing information from the prospective tenant to be sent out for referencing at the simple push of a button.

Arthur Online’s tracking system allows you to easily track the progress of the reference.

Marc Trup, founder and CEO of Arthur Online, said:“Paperwork used to be the bane of property management, especially when it comes to HMOs. The paperwork and checks for just one building could zap a whole day.

“But now, with our integration to Advanced Tenant Referencing you only have toput the tenant’s information in once to get it checked, issue the tenancy, file the details with the accountant and deal with any issues that arise.

“At Arthur Online, we are all about enabling our clients to navigatethe minefield that is property management, and Signable and Advanced Tenant Referencing are the latest of a number of leading tools we use to do just that.”

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New selective licensing rules come into force today

November 1, 2018

BTL landlords in parts of Sheffield must now apply to the council for a licence to let their properties after selective licensing came into effect today.

Under the new regulations, all landlords who own property in parts of London Road, Abbeydale Road and Chesterfield Road, must have applied for a license in order to carry on renting out their properties to tenants.

The new scheme is being introduced to improve the standard of properties in the local PRS, according to Sheffield City Council.

Landlords who have not yet applied for a licence are at serious risk of breaching the law and could face criminal prosecution and financial penalties.

Cllr Jim Steinke, cabinet member for housing at the council, said: “Don’t underestimate our commitment and our powers.  We mean what we say.

“We have thousands of safe and well managed private rented properties across the city.  But we cannot ignore the despicable conditions we saw on London Road, Abbeydale Road and Chesterfield Road. We encourage all landlords to help themselves and take responsibility.

“Everyone deserves to live in safe, good quality housing, regardless of whether they rent or own their home.”

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Changes to the eviction rules now impact older tenancies

November 1, 2018

Good tenant selection can go a long way to reducing the likelihood that you will have to go through the eviction process, but the fact still remains that there is highly unlikely to be a landlord anywhere in the UK who is 100% immune from the possibility of needing to evict a tenant.


In the old days, landlords could simply turn up (with the help of some ‘muscle’) and order a tenant to leave. Those days are long gone and while no reputable landlord is likely to want to see them back, all landlords absolutely must familiarise themselves with new rules relating to evictions.


The basics of evictions


If a landlord wishes to evict tenants they must use either a Section 8 notice (where a tenant has given grounds for eviction) or a Section 21 notice (if the tenant is not at fault in any way).


A section 21 notice essentially informs your tenant that you plan to take possession of your property and that, therefore, they must vacate it.


A Section 8 notice can be served at any time, whereas a Section 21 notice can only be served during a contract if there is an agreed break period, at the end of the contract or if a contract is continuing on a “rolling” basis, rather than having been extended for another fixed term.


Landlords cannot serve a Section 21 notice during the first four months of any tenancy and must give tenants at least two months’ notice of their intention to reclaim their property. In other words, unless a tenant gives cause for eviction, landlords should assume that they will be in the property for at least 6 months.


The 2015 Deregulation Act


Prior to the 2015 Deregulation Act, landlords were able to serve notice to tenants in any written form. Now they must use a designated form available for download on the website.

In the case of Section 21 notices, this is form 6A. When the 2015 Deregulation Act was first implemented, this requirement only applied to tenancies commencing on or after 1st October 2015. Now it applies to all tenancies regardless of their start date.


Rules which may come into force in future


There are two other provisions of the 2015 Deregulation Act which are not currently in force for older tenancies.


One of these is that a Section 21 notice cannot be served within six months of the landlord being served with an improvement notice or emergency remedial action notice being served by a local council and the other is that a Section 21 notice can only be held to be valid provided that the tenant has been given an energy performance certificate and gas safety certificate prior to the commencement of the tenancy.


In September 2015, the Ministry of Housing, Communities and Local Government (MHCLG) has indicated that neither of these requirements will apply to older tenancies, however given the current political climate it seems entirely within the bounds of possibility that the first provision could be applied at some point in the future.


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

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Vernon Building Society launches 5-year fixed rate on its buy-to-let range

November 1, 2018

Vernon Building Society has launched a new five-year fixed rate deal, as part of its buy-to-let product review.

The new product, which is available across its BTL range, including limited company and holiday lets, is offered at a fixed rate of 3.84% until 30 November 2023, with a £995 fee and affordability assessed at a rate of 5% with Interest Cover Ratio (ICR) of at least 130%.

Vernon, which has increased its maximum loan-to-value (LTV), has also launched a three-year discounted buy-to-let rate at 1.5% with a £495 fee with no Early Repayment Charges.

However, the lender has now withdrawn its three-year fixed rate buy-to-let products.

Tom Gurrie, intermediary sales manager at Vernon, said: “Our buy-to-let review gives brokers more options for their clients.

“Whether landlords are looking for a low-rate, low-fee combination to minimise their outgoings, the security of a five-year fixed rate or ERC-free flexibility, all can now borrow up to 75% LTV on our buy-to-let range, as individuals or limited companies.”

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Strong demand for rental homes as standards ‘higher than ever before’

October 31, 2018

Buying a property is cheaper than renting in every area of the UK, a recent study found, and yet a growing number of people are choosing to rent. But why is that?  

Research from Santander Mortgages shows that owning a home in this country typically costs £2,268 a year less than renting one, but an increase in high quality rental properties is, to an extent, deterring many would-be property buyers from acquiring property, according to Property expert Kate Faulkner.

The PRS in England and Wales, which has more than doubled in size since 2002, accounted for 20% of households in the recent English Housing Survey, and while Faulkner accepts that this is partly due to increased demand, she firmly believes it is hard to ignore the improvements in the quality of rental stock.

Faulkner makes the claims in a report on the growth of the PRS commissioned by the TDS Charitable Foundation.

She said: “To understand how the PRS has grown, we need to be able to see beyond headlines about house prices to know what’s really going on.

“The main contributing factors are – as is commonly understood – a lack of social housing provision, and house price growth outstripping wage increases for many, but that’s not the whole story.

“If we look at a more local level, there are places where affordability has increased but the number of first-time buyers continues to decrease, suggesting house prices and demand aren’t the only forces at play.

“Over the same period that the PRS has gone through dramatic expansion, it’s also improved considerably. Standards of rented properties are now arguably higher than ever before. The increased quality of accommodation has reduced the ‘need’ to buy.”

Faulkner points out that “good quality” rented properties are often much cheaper and more easily accessible than purchasing property, especially in the short to medium term.

She continued: “When high standards of accommodation are available, with the added bonus of flexibility, it can make an enticing proposition.

“There is also caution in some parts of the market, with potential buyers lacking confidence that house values will continue to rise.

“That fear, coupled with tougher restrictions on buy-to-let mortgages putting off landlords from entering or continuing in the market could lead to situation in the PRS where demand is increasing and supply is decreasing.

“More research is required into the nuances of the UK’s housing market and stock to understand affordability, renting landscapes and ultimately; to make more effective legislative decisions.”

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Accord adds to its buy-to-let range

October 31, 2018

Accord has added to its range of buy-to-let products, including the launch of new cashback options on its two-year fixed rate range, and reduced rates by up to 0.2% on selected three-year deals.

The intermediary lender, part of the Yorkshire Building Society, has also launched two new tracker deals that it hopes will appeal to borrowers.

New products include a two-year fixed rate at 1.72% at 60% loan-to-value (LTV), which is subject to a product fee of £1,495, but comes with a free standard valuation. Landlords who are remortgaging will receive free legal fees, while those adding to their portfolio can get £250 cashback on completion.

There is also a two-year fixed rate product available at 2.89% at 75% LTV, subject to a fee of £195 and free standard valuation, which offers £1,000 cashback to landlords remortgaging or extending their portfolio.

Buy-to-let landlords looking for a three-year deal will find rates starting from 2.72% at 75% LTV, with free standard valuation and £500 cashback available on completion.

Accord has also launched two new two-year tracker mortgages at 75% LTV, with rates starting from 2.29%. The tracker mortgages include free standard valuation, have a product fee of £950 and come with no early repayment charges.

Chris Maggs, commercial manager at Accord Buy to Let, said: “We believe these new products will be welcomed by brokers whose clients are looking for choice and flexibility when managing their portfolio.”

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New buy-to-let affordability calculator launched by Magellan Homeloans

October 31, 2018

A new buy-to-let affordability calculator, which allows brokers to simply input basic borrowing requirements to see the maximum loan available on two-year and five-year fixed and Libor trackers in one view, has been launched by Magellan Homeloans.

The calculator shows Magellan’s approach of blending ICRs, reflecting borrowers’ individual tax positions, can be used for both personal name buy-to-lets and buy-to-lets in a limited company and flags where borrowers may be able to borrow a higher amount if they apply through a limited company.

It can also produce the rate and monthly payment quicker than most and display it in one view that can be printed.

Simon Read, managing director of Magellan Homeloans, said: “In its format this is an industry first. It’s for the ease of the broker, taking a couple of clicks rather than a whole morning working out calculations. Part of our job is to find ways to make life easier for our partners.

“When a low rate and a high rate taxpayer get a buy-to-let together lenders penalise the low rate taxpayers by stress testing on the high rate taxpayer.

“We offer affordability based on actual tax position, not workplace scenario. It’s fair, only paying tax on income. It’s fantastic and the way the market will go. Borrowers can take advantage of having a lower taxpayer on the mortgage. It’s a benefit for borrower reflecting their actual circumstances.

“For us it’s a real step forward and I hope it makes a difference and makes life easier. I think we’ll see lot of other lenders follow suit with a similar calculator and blended ICRs which we believe are the only way forward for individual borrowers.”

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Where does the challenges faced by BTL landlords and lenders end?

October 31, 2018

Investing in buy-to-let property has long been a lucrative business opportunity for both recreational and professional investors, but could harsh tax changes start to outweigh the attractive yields and capital growth the market has to offer. 

The government’s introduction of the 3% stamp duty tax placed on secondary homes and the withdrawal of tax relief by 2020 has left landlords salves to the property market.

Since the BTL changes issued by the Prudential Regulation Authority in September last year, property experts, investors and landlords have been subject to regular scrutiny, with new punishing rules leaving hobby landlords unable to raise funds from mortgage lenders.

Due to the uncertainty and instability of the current property market, there has been a rush to place buy-to-let investments on limited company structures, resulting in an unwillingness from lenders to support such impulsive investments. Combined with the lack of lenders who possess the ability to read balance sheets and understand the laws affecting lending positions, it is clear to see why certain traditional lenders are struggling to keep faith in the process.

As a result of such uncertainties, some recreational buy-to-let investors are opting to invest in Houses of Multiple Occupancy (HMOs) in a bid to improve yields. However, few are aware of the new regulations in place that could have a significant impact such as the extension to mandatory HMO licensing.

According to data revealed by the Office for National Statistics (ONS), the punishing state of the property market isn’t just affecting investors, with tenants in London struggling to save deposits and a startling 49% of their salary being spent on rent alone. The rest of the UK doesn’t fare particularly well when it comes to property to income ratios, with a property costing around 3.6 times as much as earnings in 1997 compared to 7.6 times as much in 2016.

The daunting trends aren’t however seen throughout the Midlands with 42% of landlords in the East Midlands and 33% of landlords in the West Midlands claiming that tenant demand was steadily increasing. As a result of strong economic growth, a thriving education sector and government led schemes such as the Northern Powerhouse Initiative; the Midlands have been able to buck the trends that have devastated the rest of the country.

Despite worrying statistics revealed by the ONS and the current state of the market, a recent survey found that buy-to-let mortgages for property purchases have fallen by 40% since 2015, offering a glimmer of hope for the future of BTL investors. 

Punishing tax changes and the harshness of lenders may streamline the property market in order to benefit experienced and professional investors. Should the market undergo change in the coming years (which is likely), we can expect to see a decline in recreational investors looking exploit the market in a bid to secure fast capital growth and enjoy a continued rental income. Investors and landlords now require levels of expertise in order to keep up with the changes to the market as a result of political shifts and policies.

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

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What are your plumbing responsibilities as a landlord?

October 31, 2018

Being a landlord demands a high level of commitment, not only to reduce void periods and keep your property marketable but also to maintain its safety and habitability for tenants.

One issue that commonly arises between landlords and their tenants is which party is responsible for maintenance issues such as plumbing.

With that in mind, here’s a detailed run-through of the facts so you know which plumbing issues you are legally responsible for.

Pre-tenancy plumbing checks

Before a new tenancy begins, it is the landlord’s responsibility to identify and fix any plumbing issues that exist within the property. The property must be in a safe and liveable condition when the tenant moves in. If it’s not, it could lead to enforcement action from the local authority. Your pre-tenancy plumbing checks should include:

+ Taps – Check for any drips or leaks

+ Sinks – Make sure water is draining properly

+ Bathtubs/showers – Replace the seals if necessary and look for signs of damp

+ Pipes – Check for corrosion on metal pipes

+ Drains – Remove any obstructions from the gutters and drains. A pre-tenancy drain clean and inspection will provide peace of mind.

+ Boilers and hot water cylinders – Check that everything is working as it should be. All gas appliances should be inspected annually by a Gas Safe engineer

+ Radiators, fittings and valves – Make sure the radiators are working properly

+ Accessibility – If one or more of your tenants is disabled, you may be required to make reasonable adjustments such as the installation of bathroom handrails 

If any plumbing issues are identified before the tenant moves in, then it is your responsibility to fix them. As well as ensuring the safety and habitability of the property, this will also allow you to identify problems early before they develop into serious and more expensive issues.   


When the tenant moves in

When the tenant moves in, you should provide them with information they can use in the event of an emergency – for example, the number of an emergency plumber and instructions about how to turn off the mains water and gas supply.

You should also explain the potential damage that can be caused by washing non-biodegradable items and food waste down sinks and drains, and make them aware that any blockages to drains, waste pipes and gullies through misuse will be their responsibility. This can be included in a tenant information pack or communicated verbally.

The responsibility for repairs

Once the tenant has moved into the property, the responsibility for plumbing repairs depends on the reason for the fault and the type of repair. If damage has been caused through misuse by the tenant or a tenant exacerbating a problem by attempting to fix an issue themselves, then they will be required to foot the bill. If a fault is the result of normal wear and tear, then it should be fixed by the landlord. However, if it’s a minor repair, such as a dripping tap, that’s likely to be the responsibility of the tenant depending on the terms stipulated in the lease.

When should repairs be made?

If a tenant contacts you to inform you of a fault, then you should tell them when you expect the repair to be made. This must be within a reasonable timeframe. What constitutes a reasonable timeframe depends on the severity of the fault.

  • Urgent repairs – If there is a serious issue that affects the safety or habitability of the property, then it is the responsibility of the landlord to make the repair. Urgent repairs should be attended to within 24 hours whenever possible and include:
    • Blocked toilets
    • Burst water mains
    • Ceiling leaks
    • Flooding
    • Any other plumbing fault that makes the property unsafe
  • Non-urgent repairs – The responsibility for non-urgent repairs will depend on the rental agreement and the reason for the fault. It will include things like leaking taps and blocked drains. This type of fault should be repaired within 14 days.

Extra clarity to keep things flowing

If you’re a new landlord and are not sure where your responsibilities start and finish, or you need a bit of a refresher, hopefully this handy guide will help you avoid conflict and uncomfortable conversations in the future.

Rob Simpson owns the East Anglian Drain Doctor franchise. 

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Autumn Budget delivers ‘another tax hit for landlords’ – industry reaction

October 30, 2018

Philip Hammond has once again failed to reverse the previous chancellor George Osborne’s deeply unpopular tax reforms that have had far-reaching implications for the buy-to-let sector.

The government’s decision to phase out mortgage interest tax relief and introduce a 3% stamp duty surcharge for additional properties is having a detrimental impact on households up and down and the country, and yet the Chancellor opted to ignore the issue, despite the fact that there is plenty of evidence to suggest that the tax clampdown on landlords is resulting in rent increases for tenants across the UK.

Russell Gould, CEO, Vesta Property said: “We are disappointed that once again property has taken a back seat and the much needed tax breaks to support landlords who provide the nation’s tenants with valuable rental homes have been ignored.”

James Davis, founder and CEO of online letting’s agency, Upad and himself a portfolio landlord, feels that the government should treat landlords with “more respect” and recognise that for many, working within the PRS is a business choice which should command the same respect as more mainstream business areas. 

“I honestly believe we [landlords] are needed and that, therefore, our future is safe,” he said.

The only lettings relief that Hammond offered in his Budget statement was to those landlords who are in shared occupancy with their tenant.

Limiting lettings relief to properties where the owner is in shared occupancy with the tenant is “as good as removing it in its entirety”, according to Robert Nichols, chief executive of Portico letting agents.

He said: “Once again, private buy-to-let landlords have to get their heads around another tax change that will leave them worse off in the long run.

“The new restrictions on lettings relief are a further punishment to hard working individuals who have chosen to invest sensibly in residential property.”

Robert Pullen, partner at Blick Rothenberg, firmly believes that limiting lettings relief to properties where the owner is in shared occupancy provides “another tax hit for landlords”.

He commented: “The £40k relief on sale will be all scrapped, except for rent-a-room properties.”

Neil Cobbold, chief operating officer of PayProp UK, is rather surprised that the government did not announce a more stringent clampdown on short-term lets.

Although this sector provides a great boost to the economy, Cobbold was keen to point out that it also affects the fortunes of the lettings sector, and that is why he feels it is the “right time for initial regulation”.

He said: “There has to be an equal tax footing for conventional landlords and those looking to let their homes on a short-term basis, and the proposal for limited tax relief on properties where the owner is in shared occupancy with the tenant marks the very first step towards achieving that.

“Over the next decade, it is likely that the short-term lets market will continue to expand, so it will be interesting to see if the government takes a similar regulatory approach as it has done with standard lets in the private rented sector.”

The Autumn Budget statement was also a “missed opportunity” to introduce tax breaks for landlords offering long-term tenancies, according to Cobbold.

He continued: “This would have been a welcome move by the government as it would have allowed landlords and tenants who want to pursue longer tenancy agreements to do so without making it a mandatory requirement for the entire PRS.

“Industry research has shown that mandatory longer tenancies may cause some landlords to exit the sector, and that not all tenants are looking for long-term agreements.

“However, for many landlords a capital gains tax break would be a timely incentive to continue to provide much-needed rental housing stock.

“Such a policy could have provided vital feedback to the government’s previously announced plans to introduce mandatory three-year tenancies, indicating whether long-term tenancies are needed or if they should remain an optional decision rewarded with a tax break.”

There was also a lack of information in the Budget on the implementation of the Tenant Fees Bill, which is a concern.

“The ban on upfront fees charged to tenants was first proposed by Chancellor Philip Hammond almost two years ago, along with a cap on security and holding deposits,” Cobbold added. “Given the length of time that has passed, it's crucial that letting agents, landlords and tenants get more information about when and how it will be implemented.”

Rory O’Neill, head of residential at Carter Jonas, concurred: “The Chancellor has withheld much-needed support from landlords and tenants who are in a continuous state of flux over changes in fees and tax legislation.

“We would urge the government to explore the correlation between financially squeezed landlords, many of whom struggle to invest in their properties, and tenants struggling to find homes that are fit for purpose.

“In throttling landlords with the removal of taxation relief, many are vacating the market altogether, which is creating a shortage of good quality lettings properties in an affordable price bracket. Not ideal when so many tenants are already crippled by rents and unable to save for a deposit of their own.”

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Growth in social media screening highlights need for tenant referencing

October 30, 2018

Tenant referencing has once again been a topic of hot debate over the past few weeks, following a fresh study that found more landlords are turning to social media to garner information about rental applicants.

While the growing trend for landlords turning to social media to screen prospective renters shows the importance of good tenant referencing, it is no substitute for comprehensive checks to help landlords make an educated choice about who will be occupying their rental property, according to Mike Georgeson, founder and chief executive of RentalStep. 

Recent research by Foundation Home Loans revealed that an increasing number of landlords are using social media platforms to find out more about would-be renters, with 11% now checking Facebook and other social media accounts to screen tenants before they let a property to them.

Information available on Facebook, Twitter, LinkedIn and Instagram profiles could include everything from lifestyle and career history to relationship status, the company people keep and whether or not they like pets.

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

Georgeson commented: “This study confirms what we already knew: landlords are keen to know more about prospective tenants before they let a property to them and are also understandably concerned about who they are handing over their properties to.”

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

Tenant referencing is essential in order to obtain an accurate picture of the tenant’s financial and employment situation and find out how they conducted themselves during their last tenancy. Using a professional referencing agency to do this is an invaluable safeguard for all landlords, according to Georgeson.

He added: “While social media accounts can offer an insight into someone’s life and allow a landlord to get to know them better, it’s a far less effective way of screening tenants than professionally carried out tenant referencing.”

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Property licensing: too many landlords face ‘unnecessary criminal proceedings’

October 30, 2018

Landlord licensing schemes are popping up all over the UK as local authorities step up their efforts to clampdown on rogue operators, but it would appear that they are deterring many property investors from investing in the PRS.

Many landlords object to local authority housing licensing schemes, with some viewing them as little more than a money-making exercise designed to boost council coffers, while others claim that some councils’ have adopted ‘pretty heavy-handed’ law enforcement tactics.

David Kirwan, from Kirwans law firm, has voiced his concerns that heavy-handed councils are driving private landlords out of areas where selective licensing schemes are in place, adding to the growing ‘rental supply crisis’.


The solicitor say that he has been contacted by a number of ‘responsible’ landlords with properties affected by selective licensing laws who have been ‘utterly devastated’ to find themselves hauled before the courts, simply for failing to apply for a licence.


Some landlords, in worst case scenarios, have been handed a criminal record, an order to repay 12 months’ rent, or be banned from renting out a property in the future.


Even if councils choose to avoid the courts, civil penalty fines of up to £30,000 can be imposed.


Kirwan fears that many landlords providing good quality accommodation in areas affected by the schemes will sell-up and invest elsewhere, rather than risk falling foul of the rules.


He said: “I am currently representing decent, professional people who have ventured into the world of buy-to-lets only to find themselves facing a criminal record for failing to apply for a licence that, in other areas of the city, would not even be deemed necessary.


“We’re not talking about roguish, exploitative landlords here; rather people who simply saw property as an investment that would see them through retirement.


“It is heart-breaking to watch them going through completely unnecessary criminal proceedings, simply for failing to apply for a licence.”

Using selective licensing legislation introduced by part three of the Housing Act 2004 in areas affected by poor-quality rental properties, irresponsible landlords and anti-social behaviour, local authorities are able to introduce penalties that go well beyond the mandatory government landlord licensing rules.


Each scheme applies to a designated area for a period of five years, and landlords have to apply for a license for each home affected.


But the schemes have faced criticism for both the cost of licenses - which usually run to hundreds of pounds - and for the fact that they may drive the very rogue landlords they are supposed to weed out further underground.


They have also proved confusing for landlords, who are often unaware that their property even lies in a selective licensing area.


Rogue landlords, ironically, may simply choose to avoid the licensed areas, moving their poor practices to areas where such schemes are not currently in place.


Kirwan said: “While there may be many unethical landlords who absolutely need to be weeded out, they operate in an entirely different manner to the many decent men and women, some of whom are only just entering the rental sector, who simply want to provide good quality rental accommodation.


“For these people, who may be finding their way in the rental market, or are unaware that such schemes have even been introduced in their area, the idea that they could face prosecution with a conviction leading to limitless fines or outrageous penalty fines is nothing short of terrifying.


“Landlords are now telling me that, rather than face this sort of frightening action, they will either sell-up, or choose not to invest in property in affected areas in the first place. This will then reduce the choice of accommodation on offer for those renting, leading to a lose-lose situation for all.


“My advice to all landlords would be to check with their local council as to whether their property requires a licence, and to seek legal advice immediately if they receive a letter from their local LA [local authority] threatening fines or prosecution.”


In June the government announced a review of selective licensing and how well it is working, with the findings due to be published in Spring 2019.

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Shortage of rental properties continues to push rents up

October 30, 2018

A continued shortage in the number of rental properties on the market is placing upward pressure on rents across most parts of the country, a fresh report shows.

Rightmove’s latest rental tracker found that rents are rising across many parts of Britain due to a supply-side squeeze in the rental market, caused primarily by changes to the buy-to-let tax regime which is deterring new and diminishing existing investment in the private rented sector.

In the third quarter of the year, there were 8.7% fewer rental properties marked available compared to the corresponding period last year, contributing to a quarterly rent rise of 0.8% in Q3 2018 – the largest increase recorded at this time of year since 2015.

In London, the number of available rental properties is down by 19.4%, but the biggest jump in rents has actually been recorded outside the capital.

According to Rightmove, the average asking rent for a home across Britain, but excluding London, hit £802 per calendar month in Q3 2018.

It is the first time the property website has seen average rental asking prices outside London surpass £800pcm in its records going back seven years.

Within London, the average rent being asked for a home stood at £1,992pcm at the end of September, according to Rightmove’s .

Miles Shipside, commercial director and housing market analyst at Rightmove, said: “Rental demand is currently outstripping supply in many locations, especially in the capital.

“The exit of more landlords from the buy-to-let market in recent years has been due to a raft of different factors, from the more onerous tax regime and more stringent borrowing criteria, to the higher stamp duty on second home purchases and extra legal obligations.

“What we’re left with is a lack of available homes for tenants looking to find their next place to rent, meaning that when the right kind of property does come along it isn’t sticking around for very long before it’s snapped up.” 

Scotland performed best for price growth in Q3, with a 2.8% increase in asking rents leading to an annual rate of 3.8%.

Shipside added: “Although some of the shortfall in supply will be met by quality housing provided by Build to Rent schemes in the coming years, it’s likely stock shortages will remain in areas with a high concentration of renters.

“Given this backdrop and rents likely to rise, private landlords should try and look beyond the current challenges if they can and stay in the sector. If they concentrate on improving the spec of their existing properties and buy better quality accommodation to add to their portfolios, tenant demand should steadily improve rental yields.

“Long term security is important too so see if landlords are open to negotiating a longer tenancy, perhaps with inflation only increases, as many will be keen to keep good tenants.”


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National LIS Awards shortlist announced!

October 30, 2018

The organisers of the National Landlord Investment Show have announced the shortlist for the 2018 National LIS Awards.

The team at Landlord Today, a proud media partner of the National LIS Awards, would like to offer our congratulations to all the shortlisted finalists.

Celebrating excellence in the private rented sector, the National LIS Awards will take place on Thursday 15th November 2018 at the Grosvenor House, London.

Tickets are now on sale for the Awards Dinner in central London and can be acquired by clicking here

The awards provide an excellent opportunity to celebrate all the hard work that goes into our industry, rewarding excellence and giving leading organisations the recognition it deserves.

More than 400 key industry players will gather from the private rented sector including buy-to-let landlords, professionals from finance, legal, tax, development, letting agent, online agent, auction house, local authority, landlord insurance, proptech and innovation companies.

There are 14 categories in total, including Best Landlord Accountancy Provider, Best Landlord Insurance Provider, Best Landlord Legal Services Provider, Best Buy to Let Mortgage Provider, Developer of the year, Best Lettings Agency, Best Online Agency, Specialist Finance Provider of the Year, Best Property Education Provider, Crowdfunding Platform of the year, Proptech Company of the year, Best product for Landlords, Best Auctioneers, and Best Investment Provider.

The shortlisted finalists can be seen below.

Nat Daniels, CEO of Angels media, Landlord Today’s parent company, will be among this year’s judges.

Other people on the judging panel of the National LIS Awards include Richard Bowser of Property Investor News, Simon Zutshi of Property Investor Network, Marie Parris of George Ellis Property Services, Kate Faulkner of Designs on Property, Peter Littlewood of iHowz, and Carolyn Uphill of the NLA.

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IPSE backs Vince Cable’s call for halt to Universal Credit roll-out

October 29, 2018

The Association of Independent Professionals and the Self-Employed (IPSE) has backed the Liberal Democrat leader Vince Cable’s calls for a halt to the roll-out of Universal Credit.

The IPSE particularly backs his calls to take fluctuating income into account and assess earnings not over one month but several.

Ahead of today's Autmn Budget, Cable, the former Business Secretary, has called on the government to immediately pause its rollout of Universal Credit for the good of people in most need of support.

In an article he wrote for the Mirror, he said: “While the current government’s handling of UC [Universal Credit] has left it on life support, Liberal Democrats argue that with a pause followed by some major reforms, the system could yet be salvaged.”

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

Labour’s John McDonnell also wants to see Chancellor halt the highly contentious rollout of Universal Credit.

Earlier this year, the Liberal Democrat Department for Work and Pensions (DWP) spokesperson, Stephen Lloyd, warned that Universal credit could cause up to 1.3 million evictions from privately rented homes because delays in payments meant more tenants were in rent arrears.

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

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

At present, as well as suffering from significant delays, Universal Credit penalises the self-employed by not accounting for their fluctuating incomes. It can leave a self-employed person up to £3,000 worse-off a year compared to employees earning the same amount, the IPSE says.

Jordan Marshall, policy development manager at the IPSE, commented: “Universal Credit has been a disaster for many people – particularly the self-employed. At present, it simply does not work for them. Not only are they suffering from the severe delays of this creaking system; it also penalises them for their way of working.

“Vince Cable is absolutely right: the current system of calculating Universal Credit payments on a monthly basis doesn’t consider the fluctuating nature of self-employed income.    

“Calculating payments over a few months, or as IPSE prefers, over the course of the year, is a much fairer approach.

“To make Universal Credit really work, the government should also listen to Mr Cable’s call to give the self-employed more time to get their businesses up and running before the monthly assessments kick in.

“The current 12-month grace period forces people to abandon their businesses before they have a chance to succeed.

“Mr Cable’s suggestion to increase this period from 12 to 24 months is a step in the right direction, although IPSE would like to see this extended even further.

“Then, this flawed system could be made to actually work for the UK’s self-employed strivers.”

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Lenders need to keep an eye on BTL landlords with tenants on Universal Credit

October 29, 2018

Almost two-thirds of private landlords with tenants receiving Universal Credit have had problems with non-payment and arrears, according to the latest research from the Residential Landlord Association’s research exchange, PEARL.

It found that 61% of landlords with tenants on Universal Credit have experienced them going into rent arrears, compared to 27% in 2016; on average, these tenants owe almost £2,400; 49% more than last year.

The statistics are very worrying and highlight the urgency in which the government needs to revisit the new benefits system.

The idea of the welfare reform is to simplify benefits for working-age people by merging income support, jobseeker's allowance, employment and support allowance, housing benefit, child tax credit, and working tax credit into one single Universal Credit payment.

But it has been plagued by problems since it was first announced in 2010 and recently, pressure has been mounting on the government to either delay or halt the next stage of the reform.

The main criticism is timings; it takes up to 35 days for claimants to receive their first payment, leaving them struggling to pay their bills.

This then, of course, has a knock-on effect on landlords who then cannot pay their mortgages as they are not receiving the rental income they need.

This could, in turn, see arrears and repossessions rise in the buy to let sector as another issue hits landlords who have already had a hard year with all the other changes to buy to let rules.

And even those tenants on Universal Credit who are receiving their payments may not be passing them onto their landlords due to their reduced disposable income as a result of the scheme.

The government has admitted that many will be worse off under the new system with The Times newspaper reporting that some families could lose up to £200 a month.

And as Universal Credit is paid to the claimant, many landlords are concerned that if money is tighter, rental payments will be one of the first casualties.

According to the RLA, many of their members feel there should be an option where tenants on Universal Credit have payments paid directly to their landlord.

The government has already announced that it will delay the latest stage of universal credit and take a more measured’ approach starting in 2019 with a small number of people to ensure it works.

But there are still fears that the system is not fit for purpose, that people will continue to experience delays in receiving their payments and that once it is in place, too many families will be worse off as a result.

But whatever the outcome, it is highly likely that landlords across the UK will be adversely affected too. It is therefore important that the landlords’ lenders keep a close eye on their buy to let tenants’ ability to keep up with their repayments if they have tenants who are on or are soon to be moved to Universal Credit.

The most successful outcomes for both lender and borrower tend to be when the lender engages with third parties to ensure each and every borrower’s best interests are looked after whilst having a full and detailed understanding of the tenants’ situation also.

Dave Miller is account manager at Spicerhaart Corporate Sales.

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Almost a third of first-time buyers want landlords to sell to long-term tenants

October 29, 2018

As the Chancellor prepares to deliver his Budget today, research from Aldermore has revealed the measures prospective first-time buyers want put in place to help them get a foot on the property ladder.

The introduction of policies to reduce the number of empty homes across the UK and the extension of the Help to Buy scheme to all property types, not just new-builds, were the top two Budget wishes from first-time buyers, followed closely by Right to Buy, with 29% of the 2,004 people interviewed wanting to see the scheme provide much needed support for those aspiring to buy their first home.

Additional Budget wishes include other incentives for landlords to sell to long-term tenants (27%) and the scrapping of stamp duty in favour of a different type of property tax (19%).

Several reports suggest that the Philip Hammond is considering using today’s Budget to introduce a so-called ‘good landlord’ tax break rewarding buy-to-let investors who sell properties to sitting tenants.

Under existing rules, investors who sell a rental property are liable to pay capital gains tax at 28% on any profits they make, which is a major disincentive to selling up. But under the ‘Good Landlord’ plan, landlords would be eligible for tax relief with the windfall split equally with the tenant, who could use it as part of their mortgage deposit.

Damian Thompson, director of mortgages at Aldermore, said: “There is no doubt first-time buyers are facing an uphill battle to get on the housing ladder and they believe more needs to be done by the government to improve their chances of getting the keys to their first home.

Abolishing stamp duty for first time buyers in last year’s Budget was a promising move, but underlying challenges, such as affordability and supply shortages, remain.

“In 2017, more than 200,000 homes in England sat empty for more than six months, according to government figures. Getting these houses back on the market to help ease the shortfall of housing supply and provide more choice to first-time buyers has proved a popular idea among would-be buyers.

“We think the suggested measures highlighted in our research can provide the government with food for thought, and we hope to see housing feature at the top of the agenda.”


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Successive tax increases on residential property are ‘ill-conceived and ineffective’

October 29, 2018

As the Chancellor prepares for today’s Autumn Budget, more residential taxes are widely mooted to be introduced, according to various experts.

The now former chancellor George Osborne’s decision in 2016 to restrict mortgage interest relief to the basic rate of income tax and add a 3% levy on stamp duty for the purchase of additional homes has unsurprisingly not gone down well with landlords, as reflected by the fact that buy-to-let mortgage approvals have recently plummeted.

Naomi Heaton, CEO of LCP, is among those who thinks that it is regrettable that that the release of the Q3 stamp duty statistics from HMRC have been postponed until after the Budget, as it is likely to paint a grim picture and support calls to remove the additional 3% stamp duty charge on the purchase of second and buy-to-let homes.

Heaton said: “The introduction of successive tax increases on residential property is creating a black hole in the Exchequer tax take. Its aim of stimulating the domestic housing market does not appear to be working, with a fall in transactions of almost 35% over the year.

“Whilst the Exchequer could claim that the introduction of the 3% higher rate for additional dwellings (HRAD) was to reduce the number of second home purchases, the consequence of suppressing this activity is to exacerbate falling revenues, which are down more than 25% over four quarters.

“The government appears to be blindly ignoring the fact that reducing investor appetite for higher value sales, particularly in London’s luxury developments, is not freeing up homes for the domestic market.”

She added: “Hammond may well be tempted to increase property taxes to win ‘the people’s vote’ and to try and plug this black hole. The actual facts, however, are that this is neither certain to increase tax revenues, nor is it likely to stimulate the all-important domestic housing market.

“It is more important than ever to have a well-thought-out strategic approach, rather than a short-term tactical ploy.”

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Tenants set to be handed power to sue landlords over property conditions

October 29, 2018

Tenants look set to be given more powers to take action against rogue landlords renting out properties “unfit for human habitation”, following a key vote by MPs.

The Homes (Fitness) For Human Habitation Bill had its third reading in the House of Commons on Friday, and was passed without division.

The private members bill, which would apply in England and Wales, will now be considered by the House of Lords.

The bill, tabled by Karen Buck MP, would give renters in the private and social rented sector the power to take their landlord to court if their homes are deemed not fit for human habitation, at the start of, and throughout, their tenancy, thus enabling tenants to take legal action if basic standards are not met.

Private tenants can currently take action against their landlords where their property is in serious disrepair, but not when the property is unfit. However, that looks set to change.

The proposed legislation will change this by requiring all leases to have an implied covenant stating that landlords must ensure their properties are inhabitable at the start of the tenancy and throughout occupation. Tenants would be able to seek legal redress through the courts, without having to first go through their councils, if landlords fail to do this.  

It is also worth pointing out that under the proposed legislation, negligent landlords would be required to remove hazards or pay compensation to tenants.

According to Buck, about 750,000 homes in the private rented sector and 250,000 in the social rented sector have category one hazards.

The MP for Westminster North said: “Living in a cold, damp, or unsafe home is hell. It damages people's physical and mental well-being.

“It erodes the income of the poorest households. It impacts on children's education.

“The most vulnerable tenants are those most at risk of being trapped in sub-standard accommodation and they are often least able to withstand the damage such conditions do."

The government has already introduced a range of powers for local authorities enabling them to crack down on the minority of landlords who rent out unsafe or substandard accommodation.

This includes being able to fine failing landlords up to £30,000 and allowing councils to be to able to issue banning orders to kick the worst offenders out of the business. 

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Boost for renters as rent payments added to their credit score

October 26, 2018

Private tenants who pay their rent on time are set to benefit from better credit scores, after Experian said it was now taking account of the payment habits of those who rent.

The credit reference agency estimates that about 80% of tenants will see their credit score increase, making it easier to get mortgages and loans at enhanced rates.

MPs took part in a debate last year over whether rent payments should be taken into account when private renters apply for a mortgage to buy their own property.

The debate took place at Westminster Hall after a petition on the issue raised by Plymouth construction worker Jamie Pogson attracted 147,307 signatures, which is significantly more than the 100,000 needed to force a debate in parliament.

A separate survey of almost 3,000 buy-to-let landlords carried out by the Residential Landlords Association (RLA) found that 61% of landlords would support rental payments being added to tenants’ credit histories in the same way mortgage payments are.

The RLA believes that including rent payment in this way would also make it easier for landlords to make a more accurate assessment of a prospective tenant’s credit and rent payment history.

Sheraz Dar, CEO of CreditLadder, which partners with Experian to offer individual tenants the opportunity to report their rental payments which are verified each month, and for letting agents and landlord to offer the service to their own tenants, believes that the tenant rent payment recognition is likely “be standard” across the sector sooner, rather than later.

Dar commented: “As former cabinet minister Justine Greening noted in her speech to Parliament during [yesterday’s] Prime Minister’s Questions, MPs from across the political spectrum want to see rent payments recognised by lenders on a level playing field with mortgage payments, and yesterday’s Experian announcement takes this another step towards reality.

“As the first and largest of the players offering rent recognition to people who rent, we are proud to play our part in helping responsible tenants gain equal access to affordable credit both now and increasingly so in the future.”

Lord Bird's Creditworthiness Assessment Bill is due to be read in the House of Commons today after it passed through the House of Lords with no amendments. 

The Bill aims to make it a requirement for credit providers to take into account rental and council tax payment history.

Laura Hales, European head of product - credit and risk at Equifax UK, said: “Currently rental payment history isn’t necessarily reflected in people’s credit reports and in today’s society that must change. 

“This issue is exacerbated further in the social housing sector, where by allowing lenders access to rental and other payment data, such as council tax, tenants’ access to affordable credit can be greatly improved.

“Our own research has confirmed including this data would improve a third [33%] of all tenant’s credit score.

“While for those who have the thinnest files, our analysis showed almost seven in ten [69%] of tenants’ credit scores would see an improvement.

“Exciting progress is being made to enable this data to be collected and shared and we’re working closely with providers of rental data apps, lenders and policy makers to increase coverage.

“As consumer awareness continues to grow and more data become available we’re confident there will be a fundamental shift that allows more people to access credit when they need it.”

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Almost a third of renters saw rents increase in September

October 26, 2018

Some 31% of private tenants saw their rent payments rise last month, up from 27% in September 2017 and 24% in the same month in 2016, according to latest PRS report from ARLA Propertymark.

But the data shows that the number of tenants experiencing rent hikes dropped from a record-high of 40% in August.

Rents continued to increase on the back of low supply of rental stock, with the number of properties letting agents managed dropping to 194 per member branch in September, from 197 in August.

But demand from prospective tenants also fell marginally last month, with the number of house-hunters registered per letting agency branch dropping to 63 on average, compared to 64 in August

Year-on-year, this is down 20% as there were 79 prospective tenants registered per letting agent branch in September last year.

David Cox, ARLA Propertymark’s chief executive, said: “Although the number of landlords increasing rents for tenants dropped in September, this figure is still alarmingly high, and it continues to rise year-on-year.

“Increasing costs and continued regulatory change is pushing buy-to-let  investors out of the market and deterring new ones from entering.

“An average of four landlords took their properties off the market per branch in September, up from three this time last year – and as supply falls, competition among tenants increases, which is driving up rent costs.

“With the Autumn Budget approaching, we hope the government recognises the importance of increasing supply for tenants and uses it as an opportunity to make the market more attractive for BTL investors.”

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Rogue landlord database to be made freely available, says PM

October 26, 2018

Tenants will be offered access to the government’s rogue landlord database under fresh plans unveiled by Theresa May.

The Prime Minister was under growing pressure to act after a Guardian and ITV News investigation this week revealed that not a single name had been entered into the system in more than six months since its launch.

Even when landlords’ names are listed on the database, members of the general public are not permitted to see them, under the existing rules, but that is about to change.

The PM’s official spokesman said: “Our rogue landlord database has only been in place since April and has been warmly welcomed by councils as an important enforcement tool.

“As we have said, only offences committed from April this year can be included, and it can take several months to secure convictions. We are clear that we expect to see entries in the database from the new year. We also intend to make information in the database available to prospective and existing tenants.”

The government estimated before the launch of the database that there were 10,500 rogue landlords operating in England, and said it expected more than 600 of the worst offenders to be entered into the system.

Before the change in policy, the contents of the database had been planned to be kept secret from the public because the government claimed that it was “not in the public interest” to explain why that decision had been made.

May’s decision to make the rogue landlord and letting agent database available to tenants has been warmly welcomed by various trade organisations, including ARLA Propertymark.

In a letter sent out to its members yesterday, David Cox, chief executive of ARLA Propertymark, wrote: “ARLA Propertymark has long campaigned for this, repeatedly stating that the database will be completely pointless unless tenants, employers and professional bodies can check against the entries before taking a property, employing an agent or accepting an agent into membership.

“The database has been under fire this week amid reports that no individuals have been added, six months after it was established.

“The announcement is a triumph for the industry. Hiding this essential information is a prime example of the government failing to see unintended consequences of a vital policy. For this reason we have branded the database ‘truly ridiculous’ up until now.

“ARLA Propertymark is delighted that government have finally listened to what the industry has been saying since it was put into the Housing and Planning Bill nearly three years ago. We hope the database will now fulfil the objective of professionalising the sector, which we all wanted it to.”

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Landlord fined for allowing tenants to live among cockroaches, rats and raw sewage

October 26, 2018

A rogue landlord whose tenants were living in degrading conditions has been ordered to pay £9,000.

Housing enforcement officers from Harrow Council found an infestation of rats, mice and cockroaches, along with dumped and overflowing rubbish, water leaking from the roof and a broken sewage drain, when they first inspected the property on Edgware High Street, located on the edge of north-west London, but decided to take action against the landlord, Milegate Limited, after their warnings were ignored.

Milegate Limited pleaded guilty at Willesden Magistrates Court to two offences, including ignoring council warnings and failure to remove infestation and fix leaks.

Cllr Varsha Parmar, portfolio holder for environment, said: “Can you imagine living every day with the stink of sewage and the skittering about of cockroaches and rats?

“And a landlord who just won’t do anything about it? It’s like something out of a Dickens novel.

“We took Milegate to court and made them pay because that’s what we do when you ignore our warnings to make your property safe for tenants.

“Bad landlords, and tenants be warned – we’ll come after you too.”

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3mc launches new exclusive deals with Pepper Money

October 26, 2018

3mc has teamed up with Pepper Money to launch some new exclusive mortgage products that are up to 0.1% cheaper than the lender’s core range.

The exclusive buy-to-let and residential are available to clients who have not had a CCJ or default in the last six, 12, or 18 months.

Doug Hall, director of 3mc, said: “At 3mc, we make it easier for brokers to place their interesting cases by giving them access to underwriters, exclusive products and expertise.

“We have a wealth of experience in this part of the market and can work with brokers to ensure they provide the most appropriate solution to their clients.

“These exclusives with Pepper demonstrate that specialist lending is available for competitive rates.”

The buy-to-let products are available on a fixed rate for a term of five years with rates starting at 4.17%.

Residential two-year fixed rates start at 3.53%.

Clare Jarvis, acting sales director and head of national accounts at Pepper Money, commented: “Packagers like 3mc provide a vital resource for brokers to research and access the specialist mortgage market.

“It’s brilliant that we can provide brokers with these exclusive products and onsite underwriting and are able to give them the choice to work with Pepper to find a home for their interesting cases in the way that best suits their business.”

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Rented homes are urgently required, so why are landlords ‘underappreciated’?

October 25, 2018

Private landlords provide a vital service for people looking for housing, and that is why the government is wrong to persecute those who invest in the buy-to-let sector, according to haart.

A growing number of people are opting to rent as a lifestyle option, with most tenants satisfied with their existing landlord, which is why the lettings and estate agent is baffled as to why landlords often demonised by politicians, including the Treasury.

“Private landlords are providing a vital service for people looking for housing, yet the job they are doing is massively underappreciated,” said Paul Sloan, development director for haart. “Renting is regularly portrayed as a wholly negative option that people can’t wait to escape from.”

Data released by the Department for Work and Pensions (DWP) earlier this year revealed that 20% of households now privately rent their home, compared with just 13% a decade ago.

The increase in renting affects all age groups apart from the over 65s – in particular, the percentage of 35 to 44-year-olds privately renting has doubled in the past decade from 13% to 26%.

haart’s research found that many tenants are now actively looking for the benefits renting offers – whether it’s the flexibility of being able to move without having a property to sell or the freedom from worrying about home repairs and maintenance.

The company is calling on the government to rethink policies which harm the rental sector, including the 3% stamp duty surcharge and tax relief changes which are currently being phased in.

Sloan commented: “Contrary to popular opinion, renting can actually offer extra financial certainty for tenants. When anything goes wrong in a rental property, for example, it’s the landlord who arranges the repairs and picks up the bill, not the tenant.

“Terms of notice and any rent rises should be laid out in the contract before the tenant moves in so there should be no surprises during the tenancy. Indeed, many renters develop a mutually beneficial relationship with their landlord through our managed services which offers both parties the security they’re looking for, giving the tenant a secure place to live and the landlord a secure income.

“Meanwhile, renting is also a great option for those who think their circumstances might change at short notice – they can move on without having to worry about selling their home and can upgrade to a bigger or better rental property if funds allow.  It’s also great for those who have sold in order to move into a new home, putting them in prime position to buy.

“It’s clear to us that for many, renting is an active choice rather than something they feel forced into. Landlords shouldn’t be penalised for giving people this choice.”

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Failure of licensing system allows rogue landlords to ‘operate with impunity’

October 25, 2018

The government’s attempts to clampdown on rogue landlords have been branded ‘weak and pathetic’, partly due to the vast and complex rules that are creating a confusing landscape.

A Guardian and ITV News investigation found convicted landlords who failed to pass the “fit and proper” person tests, required by housing legislation in England and Wales, continue to operate by exploiting loopholes in the law that is supposed to protect the most vulnerable tenants.

The exposé also discovered that local authorities have failed to make a single entry on to the central government’s new rogue landlord database in the six months since its launch.

The Liberal Democrat leader, Vince Cable, said: “It is clear from this investigation that this legislation is too weak and is not being properly enforced. There’s no justification for treating rogue landlords more lightly than other people who break the law.”

Labour’s David Lammy, the MP for Tottenham, said on Twitter: “This is pathetic. The government’s new rogue landlord database has failed to log a single entry. And its secrecy means that even if it had logged offenders, tenants would not know. Action and transparency is needed.”

Reflecting on the Guardian and ITV’s investigation into rogue landlords and the failure of the government’s landlords licensing system, Tom Mundy, co-founder and COO of proptech company Goodlord, believes that part of the problem is that the private rented sector has been slow to embrace technology.

He commented: “This investigation has highlighted how rogue landlords can often operate with impunity. They can be caught exploiting their tenants but simply move on to another location and repeat their actions.

“It showcases how parts of the rental sector lack transparency and accountability. Much of this has to do with the fact that the sector as a whole has been slow to embrace new technology and useless government initiatives have been ineffective at creating a fair industry."

“We need to ask the question how can we create a digital history of tenants and landlords so that we provide a safer more transparent industry for us all.

“Generation Rent is here and we need to be ready for it. Current government licensing systems need to be redesigned to encourage more honest landlords rather than scaring them off and leaving us with the ones who know how to exploit the system.”

Mundy pointed out that there are various systems now available that digitise the landlord-tenant relationship, providing security for both parties and with the added benefit of being much more efficient and cost-effective.

He added: “Tenants can protect themselves by seeking out landlords and estate agents that have adopted this type of technology.

“Not only is it a good indication that the landlord has nothing to hide and is professional, but it can also provide a secure digital trail of contractual terms and documentation. This can be invaluable if disputes arise regarding the return of a deposit or notice periods.”

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The Midlands’s offer the highest buy-to-let yields in England and Wales

October 25, 2018

Buy-to-let landlords wishing to achieve the highest rental returns need to look at a variety of factors, but one of the most influential elements is location, with new data from yieldit suggesting that the Midlands offers the highest return on buy-to-let investments in England and Wales.

The figures, gathered from the online agency’s current available properties, shows that there is a wide divide in regions when it comes to investing in residential buy-to-let, with a 2.5% difference in net rental yields between the best performing and worst performing regions.

Of its available residential properties, the Midlands came out on top, with an average net yield of 6.6% including properties in popular commuter town, Tipton.

Yorkshire, thanks particularly to high yielding areas like Bradford and Scarborough, along with the North East, Wales and the North West followed, with each region commanding average net yields of at least 5.5% on average.

The South East and East of England lagged behind with averages of 4.4% and 4.1% respectively.

The data shows that London pulled down the average of the South East with net yields of just 3.7%.

Ryan Hughes, the head of sales at yieldit, said: “As always it's interesting to look at which areas are performing the best in terms of NET yields. It's no surprise to see the Midlands leading the way with attractive asking prices and rising tenant demand.”

He added: “It's clear that high property prices in the south and London have had a negative impact on net yields and as such investors are looking further afield. As renters continue to abandon the capital in favour of our regional cities we are seeing landlords follow – a trend that shows no sign of abating any time soon.”

Average net yield by region according to yieldit's available properties:

Midlands – 6.6%

Yorkshire – 5.7%

North East – 5.6%

Wales – 5.6%

North West – 5.5%

South East – 4.4%

Wales – 5.6%

East of England – 4.1%

London – 3.7%

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Buy-to-let product numbers for limited companies double in last year

October 25, 2018

The number of buy-to-let mortgage deals available to landlords who operate their properties through limited companies has more than doubled in the last year, new figures show.

According to Mortgages for Business’ Buy to Let Index, the total number of mortgage products available to landlords borrowing via a limited company averaged at 628 during the third quarter of 2018, up from an average of 263 in the corresponding quarter last year, thanks to a rise in the volume of buy-to-let lenders lending to limited companies.

In Q3 2018, there were 22 BTL lenders lending to limited companies, up 47% on the 15 lenders operating in the market in Q3 2017.

New lenders include West Bromwich Building Society, Magellan Homeloans and a lender which is currently running an exclusive pilot with Mortgages for Business.

The rise in the number of mortgage products available to landlords borrowing via a limited company reflects the fact that significantly more BTL purchases are now being made via a corporate vehicle, as landlords respond to the government’s tax changes, including the phasing out of mortgage interest tax relief.

The index revealed that 44% of all BTL purchases were made via a corporate vehicle in Q3 ‘18, from 42% in Q2 ‘18.

Steve Olejnik, managing director at Mortgages for Business, said: “It has been encouraging to see so many new entrants to the specialist end of the buy-to-let market in the last quarter, putting product availability at an all-time high.

“This just goes to show there is still a lucrative, buoyant market out there following on from the recent regulatory changes.”

In the wider buy-to-let mortgage market, an average of 1,571 products were available in Q3 ‘18, up from an average of 1,547 in Q2 ’18.

Remortgaging continued to dominate the market, with just one-third of buy-to-let mortgage transactions being made for purchases.

The only property seeing an increase in transactions was HMOs, where 36% of transactions were purchases, up from 33%.

The data also shows that 96% of landlords borrowing via Mortgages for Business opted for a fixed rate buy-to-let mortgage in Q3 2108, up from 93% in the previous quarter, with 73% of those choosing to fix opting for five years.

Olejnik commented: “With the uncertainty surrounding Brexit and the possibility of another Bank Rate rise in the near future, I am not surprised that the majority of landlords are choosing to fix.

“It will be interesting to see what knock-on effect this will have on the buy to let remortgage market.”

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UK rents facing first full year of negative growth since the global financial crisis

October 25, 2018

The UK rental market remained in recession during the third quarter of 2018, the latest figures from The Deposit Protection Service (The DPS) show.

The rental index, based on the deposit protection service’s database of millions of properties across the UK, reveals that average rents dropped for the third consecutive quarter in Q3 2018, falling from £764 per calendar month (pcm) to £761pcm.

The average UK rent has now decreased £14, or 1.83%, since Q3 2017 and is now lower than the national average for 2016, according to the DPS.

Another quarter of lower rents in Q4 2018 would mean the first full year of negative growth since the global financial crisis in 2008 and 2009, based on the data provided by the index.

Julian Foster, Managing Director at The DPS, said: “A third consecutive quarter of declining UK rents signals that there will be no immediate bounce back from the recession that hit the market last quarter.

“This negative period forms part of a slowdown that began in the summer of 2016, which we believe is linked to broader economic factors that are affecting spending power and demand.

“Another quarter of lower rents in Q4 2018 would mean the first full year of negative growth since the global financial crisis in 2008 and 2009: a significant threshold for the market.”

The greatest decline in rents was recorded in the East Midlands, falling by £14, or 2.47%, from £583pcm to £569pcm during Q3 2018.

Northern Ireland saw the biggest jump, rising by £15, or 2.68%, from £542pcm to £557pcm, which also represented the region’s second consecutive quarter of growth.

Across the UK average rents fell on all property types during Q3 2018 except detached houses, for which rent increased by £8 or 0.84% from £975pcm to £983pcm.

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Landlords take a ‘long-term performance view of their portfolios’

October 24, 2018

The reversal of controversial alterations to mortgage interest relief and the scrapping of the 3% stamp duty surcharge on additional properties understandably top the wish-list of changes that private landlords would like to see announced in next week’s Budget, but most landlords will continue to adopt a long-term investment strategy despite what the Chancellor announces, a new study suggests. 

Some people had anticipated a mass exodus of BTL landlords amid tax reforms and tighter regulations, but this seems to have been an exaggerated view of the market, according to fresh research by Upad.

The online letting agents surveyed its database of landlords to expose the issues concerning landlords and how they intend to react to what may, or may not, be announced in the Autumn Budget, which is set to be delivered on Monday 29 October.

When asked what one wish Philip Hammond could grant next week, 40% of landlords chose a review of recent changes to mortgage interest relief, whilst just over a quarter - 26% - would like to see the 3% surcharge on SDLT applied to second and subsequent property purchases reversed.

However, should neither of these come to fruition, the landlords surveyed do not intend to make any rash decisions regarding their future in the market.

Almost a third - 30% - stated that they are a committed landlord and take a long-term view on managing their portfolios; a further third (32%) would adopt a ‘wait and see’ approach to better gauge how they might be affected.  Just 7% would take steps to start selling their properties.

James Davis, CEO of Upad and himself a portfolio landlord, commented: “The decision to sell up isn’t instantly achievable and landlords need to factor in serving notice on tenants and possible renovations before tackling all the normal marketing and conveyancing hurdles.

“Realistically you can be looking at a twelve-month timeframe to sell a rental property so whatever happens next Monday, we’re unlikely to see that happen quickly.

“Added to that, however, is that our landlords take a long-term performance view of their portfolios.

“Over three-quarters of our respondents have been a landlord for more than five years and added to this, the clear majority have a very clear strategic reason for being so: for two-thirds, it’s a vital part of their pension planning, whilst for a fifth it’s their full-time job.  This isn’t something that they’ll simply walk away from.”

Upad also questioned landlords about the government’s plans to introduce a capital gains tax incentive on the sale of rental properties to sitting tenants of three years or more, with 37% of respondents  saying that this is something that they would welcome. But 33% confirmed that they were not looking to sell, so it would not affect them.

Davis added: “With 71% of our respondents confirming that they’ll maintain the size of their property portfolio in the coming year and a further 15% stating that they, in fact, plan to increase the number of properties they hold, committed landlords with a long-term, strategic view of their investments are unlikely to be deterred by whatever the Chancellor announces next week.

“They’re keen to maintain a cost-effective approach to managing their portfolios which is why they chose to work with Upad, but they also resent the burdensome nature of the tax regimes inflicted on them.  However, they’re aware of the vital role they play in the provision of homes when supply is so low, and demand is so high, so they remain resolute in their commitment to the Buy to Let market.”

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Buy-to-let remortgaging hits all-time high

October 24, 2018

The proportion of buy-to-let remortgaging hit a record high in the third quarter of the year, as more landlords looked to switch to secure cheap deals in order to maximise as much profit from their portfolios as possible to offset increased tax charges, new figures show.

Buy-to-let remortgaging accounted for 57% of all buy-to-let business, according to Paragon’s latest Financial Adviser Confidence Tracking (FACT) Index which has been capturing the experience and views of approximately 200 mortgage intermediaries on the development of the UK mortgage market each quarter since 1995.

The latest survey, tracking developments for Q3 2018, highlights a significant rise in the proportion of landlords remortgaging, up from 49% in Q2 to 57% of all buy-to-let business, as many shrewd landlords pay closer attention to how their portfolios are run.

In contrast, the proportion of first-time landlord business dropped from 14% to 10%, while landlords looking for finance to expand their portfolio were down from 23% to 19% of the total.

The proportion of landlords remortgaging has outstripped those seeking funds for portfolio expansion almost inexorably since back in 2015 following the announcement of significant tax changes for landlords in the Summer Budget.

Six out of ten intermediaries now say the main reason that landlords are remortgaging is to secure a better interest rate.

Overall, buy-to-let represented 19% of intermediary business during Q3, with the remainder taken up by mortgage applications from owner-occupiers.

John Heron, managing director of Mortgages at Paragon, said: “Landlords are investing less in the Private Rented Sector which, in time, is going to make it more difficult for tenants to find a property at a rent they can afford. This is clearly a response to the increase in costs that landlords face following changes to stamp duty and tax relief on finance costs.

“It’s no surprise therefore to see that landlords are taking the opportunity to reduce their mortgage finance costs as one part of their strategy to mitigate the impact of higher taxation.

“Tax bills due in January 2019 will include the first phase impact from the withdrawal of mortgage interest tax relief and landlords are preparing carefully for the next stages ahead.”

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Leeds Building Society launches initial interest-free BTL range

October 24, 2018

Leeds Building Society has launched a new range of buy-to-let mortgages with an interest rate of 0% for the first three months.

The new ‘Easy Start’ products, which is an updated version of Leeds BS’ ‘Welcome Mortgage’, includes four five-year fixed rate products available at loan-to-value (LTV) ratios ranging from 60% to 70%.

One 60% LTV product is offered at 2.72% with a £999 fee, while the other is available at 2.82% without a fee.

In terms of 70% LTV products, there is a 3.09% deal available with a £999 fee and 3.24% deal without a fee.

All four five-year fixed rate deals come with a free standard valuation.

Jaedon Green, director of product and distribution at Leeds Building Society, said: “Our Welcome Mortgage won awards and industry praise so we looked at how we could tailor its benefits for buy-to-let borrowers.

“When they first buy a property they might need to decorate or carry out refurbishments before tenants can move in, so clearly there’d be no rent coming in over that time.

“Cash freed up at the start of the mortgage could go towards a higher-quality fit-out to help to secure a better rental return.

“If the landlord chooses to borrow on an interest only basis, Easy Start means there would be no repayments in the first three months.

“This innovation is the latest example of how we’ve used our insight and expertise in the buy-to-let market to understand and respond to customer need.”

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Autumn Budget: Can we expect some ‘pre-Halloween’ treats for landlords?

October 24, 2018

From tax hikes to a fresh raid on pensions tax relief, there are various tricks and treats the Chancellor could have in his Halloween Budget next week, but what has he got in store for housing?

Philip Hammond is set to deliver his Autumn Budget on Monday, a whole month earlier than usual, with many experts expecting Hammond to make a number of public spending announcements in relation to Brexit, the roll-out of Universal Credit and Theresa May’s pledge to promise to end austerity.

“This budget is going to be a very interesting one to watch because there is so much uncertainty around the UK economy at the moment,” said Mike Jakeman, senior economist advisor at consultancy PwC.

As far as the residential property market is concerned, Michelle Niziol, CEO of Michelle Niziol Bespoke Property Solutions, expects to see the Chancellor unveil some “pre-Halloween treats” next week.

She said: “The Chancellor has a tough task ahead with this month’s Brexit Budget, and pleasing everyone will be harder than in recent years.

“While it is difficult at this point in time to predict exactly what the Budget will contain, there could be some pre-Halloween treats for the housing market.

“What is clear, is that the decisions made by the government will be the result of a lack of affordable homes and new housing stock for our growing population to live in.”

Buy-to-let landlords have been penalised by the government in recent years, in a bid to free up housing stock for first-time buyers. But the Budget could see the government implement tax breaks for landlords who choose to sell their properties to long term tenants.

Niziol added: “The introduction of the new buy to let tax relief would benefit both the landlord and tenant, and enable more first time buyers to purchase their first home.

“Our message to landlords is to hold off selling your property. Renting is becoming less of a dirty word in British culture, purely because of the freedoms that renting allows.

“The marked increase in the quality of rental accommodation by private landlords and the likes of new build to rent developments, highlights that the property industry is committed to making tenancy an enjoyable option.

“In the long-term, the shift towards rental culture is only expected to gain strength, placing landlords and property investors in the perfect position to supply what the market desperately needs.

“I look forward to hearing the Chancellor’s plan to make housing at all levels more attainable for our citizens.”

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Rents increase across England and Wales, with just London seeing a decrease

October 24, 2018

The average rent across England and Wales increased by 2.3% in the 12 months to September, reaching an average of £861 per calendar month (pcm) in September, unchanged from a month earlier, the latest figures from Your Move show.

Rents increased across all regions of England and Wales in the 12 months to September, except in London where prices have dropped by 1.3% year-on-year.  

But unsurprisingly, the capital remains the most expensive place to rent property, at an average of £1,271pcm, according to Your Move.

The new academic year caused a surge in activity last month, helping to support growth in rental prices.

The strongest annual growth came in the South West, where prices have risen by 4.3% to hit £686pcm.

The next fastest price rise was in the East Midlands, where the average property is now worth £656pcm after growth of 2.4% in the last year, followed by the South East, where rental prices increased by 1.8% to hit £895pcm in the year to September.

Martyn Alderton, national lettings director at Your Move, said: “Students up and down the country are beginning to return to their universities. Yet far from the outdated stereotypes of ropey student digs, many young people are able to access top quality student accommodation in their place of study.

“The growth of the student rental market has been a boon for landlords who have invested in good quality properties.

“Yet the number of living options for students means that there is real competition, with landlords having to ensure quality is high to attract the best tenants.”

Properties in northern regions continue to earn higher percentage returns than those located in southern areas.

The average investor in the North East enjoyed an annual yield of 5% in the year to August while in the North West this figure was 4.8%.

Landlords in London once again witnessed the smallest percentage returns, at an average of 3.2% in September.

Across all of England and Wales, landlords enjoyed an average yield of 4.4% in September, the same as in June, July and August, but below the 4.7% achieved in Scotland.  

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Surge in demand for rental properties in London

October 23, 2018

There has been a significant increase in demand for rental accommodation in London, according to the latest report from Benham & Reeves.

New data covering Q3 2018 shows that the firm experienced its busiest quarter in history with more than 1,000 new tenancies agreed across its 16 branches London-wide. This represents a 22.1% increase in transaction volumes compared with the same period last year.

The figures also reveal that Benham & Reeves currently has 22 applicants registered per property available, up from 16 a year ago, which partly explains why the capital is forecast to see strong growth in rental values moving forward

But for now, rents across London are, in the main, ‘flat’, despite the hike in volume and transactions, according to Benham & Reeves.

However the company added that it ‘sees this trend [in rental prices] changing in the next 12 months’, suggesting that rental values are likely to rise on the back of high demand for property to rent in London.

‘From small units to large, from new-build apartments to period, basement properties, demand has been high across the board, and at every price point,’ said Benham & Reeves.

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Landlord who gutted a listed manor house ordered to pay £82k

October 23, 2018

A private landlord who illegally modernised an historic house in Brighton has been told by a judge to pay out more than £82,000.

Grade II-listed Ewhurst Manor, built in the late 16th century, was acquired by Lars Vestergaard for £3m in 2014.

The landlord, who lives in Roedean Way, BN2, failed to secure panning consent for the alterations he made to the Grade II listed building, such as ripping out original features, including a stone fireplace, along with walls, floors and beams.

Officers from Horsham District Council attempted to inspect the property when they were made aware of the work towards the end of last year, but were denied entry by Vestergaard, in spite of the fact that they presented him with a warrant.

Despite the warning, work continued on the house on the estate, which also includes three cottages which he rents to four tenants for a total of £7,200 per month.

Prosecuting on behalf of the council and Historic England, Nicholas Maggs said: “By the time they were allowed inside, it was dark and it was difficult to see precisely what had been done, but there was no doubt that significant work had been undertaken.

“They were told the defendant was carrying out repairs and restoration, but it was clear that the work went significantly beyond that. A large section of the upper floor had been removed, plaster lathe wattle and daub had been torn out, part of the ground floor, walls and fireplaces removed.”

Vestergaard, a Danish non-dom, said that he had been ill-advised in terms of this project and was not aware that planning permission was needed to make alterations to the house.

He said: “If I look back I can see that I haven’t been informed correctly, but if I have done something wrong then it was not done intentionally.”

But district judge Tessa Szagun said she did not accept that Vestergaard had been “completely transparent”.

She said: “Listing buildings is an effective protection of the historic environment and sustain its heritage values and ensure it remains for future generations to enjoy.

“I find it difficult to accept that being a resident of Roedean Way where the immediate surroundings are renowned locally as a heritage site that he wouldn’t be aware of this.

“It’s extraordinary that he would commission builders and works without establishing conditions and establish a proper scheme.

“It’s inconceivable that, knowing that this is a listed building, he would not have known this was a kind of work which would require planning permission or that that required proper oversight.

“To embark on such a project without was clearly a deliberate closing of his eyes to cut corners and costs.

“Having been informed of the requirements, work should have stopped.”

Despite poor advice from his architect, the judge said it was ultimately Vestergaard’s responsibility to ensure the work was conducted “in a professional manner”.

He was fined £22,000 for the two charges of executing works, plus a £120 victim surcharge, plus £60,592.48 in costs.

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