Property News

Rents in London set to increase as tenant fees ban approaches

May 24, 2019

Rents in London look set to rise sharply over the next few months, as the supply of rental accommodation dwindles while demand from tenants continues to go up, new figures from Chestertons show.

Across London as a whole, the London-based letting agents recorded a 24% annual increase in registered tenants seeking property during Q1, in contrast to a 2.4% fall in the number of available properties.

The data from Chestertons’ has found rent rises in South West London in particular are significantly outpacing the rest of the capital, despite the imminent ban on tenant fees, which comes into force on 1 June.

The Tenant Fees Act will ban certain upfront lettings fees and cap deposits, but Chestertons believes that renters in the capital are unlikely to feel the benefit as this follows a series of broader legislative changes that have pushed landlords out of the market at a time when demand in the private rented sector is fierce.

The changes over recent years to buy-to-let mortgage tax relief and the stamp duty hike for second homes have encouraged many smaller landlords to exit the market, significantly limiting the choice on the market for prospective tenants and driving an increase in rents.

In the capital, Chestertons reports that this strain is most apparent in popular South West enclaves, which have typically been dominated by ‘accidental’ landlords – those who through circumstance end up letting a second home.

The number of tenants registering for rental properties in the first three months of 2019 has soared 48% year-on-year in the South West of London – the biggest jump in demand across the capital. However, the number of available properties in areas including Battersea, Clapham, Wandsworth and Putney over the same period had dropped 30% compared to the first three months of last year.

The significant supply-demand imbalance in the rental market means that the South West was the only region to experience a decline in new tenancies during the first three months of 2019 – down 12% on Q1 2018. 

By comparison, in central London locations such as Kensington, Marylebone and Notting Hill, lettings were up 15% year-on-year.

This fierce competition for limited rental properties in the South West means that rents are climbing three times as fast in this area than elsewhere in the capital, data from Chestertons show, with rents in the South West up 5.9% in Q1 2019 year-on-year, with only a 1.2% annual increase recorded in central London, and 1.8% uplift in the North and East of the capital over the same period.

Richard Davies, head of lettings at Chestertons, said: “Renters may welcome the ban on fees as it saves on upfront costs – but in terms of its impact on people’s finances, it’s distracting from the bigger issues at play.

“It’s been a turbulent few years for landlords and tenants are starting to feel the impact. With the Government’s reforms to mortgage tax relief, stamp duty on second homes, and the recent announcement of the end of ‘no fault evictions’, the buy-to-let market has become significantly more difficult to manoeuvre and as a result, it’s shrunk.”

He added: “For London’s renters it’s tackling the shortage of available properties that will make the difference – not the overhaul in tenancy fees.”

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New management service aims to help landlords avoid ‘exorbitant’ agency fees

May 24, 2019

A new online property management service has been launched by Rentora and comes with a suite of easy management tools to protect landlords from tenants falling behind on rent.

The platform incorporates a service with consumer credit reporting giant Experian that rewards good tenants, enabling them to build a positive credit score towards the point when they apply for their own mortgage.

Rentora CEO John Wade, who initially built the platform to help manage his own properties, said: “Tenants get regular text reminders when rent is due, which has drastically reduced late payments for me. They can pay securely online, through their banks or by credit card.

“The money goes direct to landlords, who can set automated text and email notifications for things such as rent due dates, rent payment alerts or key dates like gas checks. There is also fully encrypted online storage for paperwork and contract templates you can use.

“Rentora is the most intuitive, convenient way for landlords to manage their properties and takes away a lot of the stress associated with the job.

“It is significantly cheaper than paying exorbitant agents’ fees. We only charge 5% of rent payments, for which price you get access to the full Rentora toolbox. The average cost for a letting agent, on the other hand, is currently around 12% and we expect it to be closer to 18% from June.”

The tool offers much more payment flexibility – it allows tenants to pay in chunks during the month and family members can contribute too.

Wade continued: “Some tenants find it easier to pay in smaller weekly chunks or as they are paid. Some want to build up credit in the months leading up to Christmas so that they can take a month off, knowing the bill is already paid.

“And the facility for others to contribute can be helpful for parents and grandparents wanting to make contributions. The money goes direct to the landlord, which can be reassuring in some circumstances. Being able to reward good tenants with a positive credit rating is a further benefit.

“We’ve basically done everything possible to help and incentivise tenants to pay on time so that buy-to-let landlords with big mortgage bills can keep up to date with their own payments.”

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BTL landlords are ‘a dying breed ‘, warns investment firm

May 24, 2019

Buy-to-let landlords are being driven out of the private rented sector and will soon start looking for more profitable alternative investments.

That is the view of Reece Mennie, CEO of Hunter Jones, a city based investment firm that specialises in introducing clients to potentially high returning property investment opportunities.

The company recently produced a whitepaper entitled ‘A Smarter Alternative to Buy-to-Let’ that shows some individuals could have received almost a three times greater return by investing in property bonds, compared to investing in bricks and mortar through buy-to-let properties.

“Aside from it being a somewhat more attractive offering, this stat clearly signals the not so bright future of buy-to-let, providing a strong indication that landlords could well become a dying breed in years to come,” said Mennie.

Tax, legislative and regulatory changes introduced in recent years have deterred some buy-to-let investors in recent years, and that largely explains why the number of landlords has now fallen by an estimated 120,000 over the last three years.

Mennie continued: “These changes mean that only the larger, professional players are able to cope, as they can benefit from their scale of operation, whereas the average person looking to invest in individual BTLs, or HMOs, will have a much tougher job.

“Stalling Brexit negotiations have also thrown a spanner in the works with many people uncertain about domestic property investment due to the current worry over the future of the UK economy.

“Due to this, the alternative investments sector has experienced exponential growth, as more sophisticated and self-certified investors realise the potential for greater returns from property bonds compared to directly investing in bricks and mortar through buy-to-let.”

 

Mennie believes that property bonds are growing increasingly more popular with investors, especially given that they can, according to the investment analyst, “generate some of the most impressive returns currently available, and at relatively low risk”.

Mennie added: “The market is moving away from traditional buy-to-let, with major capital investors and property specialists realising the potential of property bonds.

“Unlike buy-to-let, investing into property bonds can also be a far simpler and hassle-free process, making for an easier and safer investment.

“Some of the stressful factors that you would typically have to address when investing directly into the buy-to-let property market, including council tax, estate agents, tenancy challenges, stamp duty and maintenance fees are also not applicable with property bonds, increasing their appeal.”

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Alternative to tenancy deposit scheme for landlords proves popular

May 24, 2019

Flatfair, the payment technology firm, believes that its deposit replacement scheme can help strengthen ties between landlords and tenants.

The initiative, which offers 12 weeks’ worth of protection, is designed for tenants who do not have all the funds up front for a traditional tenancy deposit.

It also includes additional perks for landlords, designed to make it more attractive ahead of the tenant fee ban and the upcoming deposit cap.

The deposit free scheme allows landlords and tenants to resolve issues harmoniously, as demonstrated in a recent claim settled on behalf of an experienced landlord and a couple who had rented her two-bedroom maisonette in Redhill, Surrey. 

The landlord submitted a claim for some dilapidations and repairs to a bathroom door costing £276 and a cleaning bill for £70; under the terms of the scheme, the tenants were happy to settle promptly.

The landlord commented: “I found the service very good… the claims submission process is really easy and the staff are very helpful. As long as you have all the documents for a claim, it works so easily that I forgot all about it till I got an email about the claim.”

Flatfair’s CEO, Franz Doerr, commented: “We hope to continue assisting those who put their trust in flatfair.”

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BTL landlords in Scotland continue to enjoy strong yields

May 24, 2019

Scotland’s rental market continued to go from strength to strength, with the average rental property north of the border generating a return of 4.7% for landlords in April, the latest data from Your Move Scotland shows.

Investor returns in Scotland continue to compare favourably to those found in England and Wales, where the average rental return currently stands at 4.3%.

The only two regions south of the border to offer returns higher than the Scottish average this month were the North East (5%) and the North West (4.8%).

Across Scotland the average rent increased 1.7% in the 12 months to April to reach an average of £581 per calendar month (pcm). 

Rents rose in three of the five regions surveyed, led by the Highlands and Islands region where prices grew by 3.6% year-on-year to reach £688pcm.

The only area to have higher rents was the Edinburgh and Lothians region, where the typical tenant pays £693pcm. This follows a 3.1% year-on-year increase.

The other area which posted an annual price rise was the East of Scotland, where rents grew by 2.1% to hit £542pcm.

Brian Moran, lettings director, Your Move Scotland, said: “As we enter the summer months, we can reflect on the resilience of the Scottish rental market, which has weathered a difficult winter admirably.

“The Highlands have continued their recent trend of strong rental yields. This is fuelled in part by an influx of young professionals into Inverness, such as student doctors at Raigmore Hospital.

“The market in this region has been further buoyed by a strong holiday lettings market as investors and tenants, from the south of Scotland and even England and Wales, are drawn to the beauty of the Highlands.

“Elsewhere we have seen rising demand from tenants for two and three-bedroom homes in commuting towns such as West Lothian and South Fife, which are providing a more affordable option for growing families.”

The South saw rents drop by an average of 1.2% year-on-year to stand at a current average of £540pcm, while rents fell in Glasgow and Clyde by a more modest drop of 0.3%, taking the average in the region to £586pcm.

There was a fall in the proportion of households in arrears during April, Your Move Scotland found.

The 10.1% figure is lower than the 10.7% recorded in March and demonstrates an improving position among renters.

On an absolute basis, the number of households in serious arrears - defined as two months or more - was 9,934 this month.

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Almost half of landlords expected to exit the PRS

May 23, 2019

Removing Section 21 could prove devastating for the private rented sector, with almost half of landlords and letting agents more likely to reduce some or all of their investment in the private rented sector, new research shows.

A new survey by the Residential Landlords Association (RLA) of almost 6,500 landlords and letting agents, their biggest ever response, has found that 46% of landlords and letting agents could quit the buy-to-let market as a result of the government’s plans to end Section 21 - so-called ‘no fault’ evictions.

The study also found that more than 40% of landlords are waiting for other planned changes by the government to become clearer before they make decisions on their ability to provide homes to rent.

Last month, the government announced plans to end Section 21 repossessions, alongside proposals on improving the process known as Section 8, under which landlords can repossess properties on grounds such as rent arrears or anti-social behaviour.

This process requires landlords to apply and be granted permission to repossess via the courts yet official data shows that it takes over five months on average from application to repossession.

According to the survey, of those landlords with experience of such repossessions, 79 did not consider the courts to be reliable. Almost 91%of landlords supported the establishment of a special housing court, bringing together all housing disputes under a single body.

With concerns that landlords selling property will usually require tenants to be evicted, the RLA’s survey found that 48% of respondents said that they would be encouraged to purchase a property to rent with a tenant in situ if they could reclaim the three percent stamp duty levy on the purchase of rental homes on the condition that the tenants can remain in the property for a year or more.

 

According to the survey, there is widespread support for new grounds to be established upon which landlords can regain possession of a property.

This included to sell a property and to ensure tenancies can best meet the needs of certain groups such as students, who do not require the indefinite style tenancies being proposed by the government.

David Smith, policy director for the RLA, commented: “Security of tenure means nothing unless the homes to rent are there in the first place.

“With the demand for private rented housing showing no signs of slowing down it is vital that landlords are confident that they can quickly and easily get back their property in legitimate circumstances. 

“Whilst the system should clearly be fair to tenants, it needs also to support and encourage good landlords.

“Our survey shows how complex it will be to ensure that the grounds on which landlords can repossess properties are both clear and comprehensive.

“This needs to be underpinned by a court system that is fit for purpose and properly resourced. At present it is neither.

“It is vital that the government’s planned reforms are carefully considered to avoid finding ourselves needing to reopen this whole issue later down the line.”

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Letting market activity slows

May 23, 2019

There was a notable drop in the number of new rental listings, while the volume of properties let last month also fell, as reduced supply restricted choice for potential renters, according to the latest data from the Agency Express Property Activity Index.

The figures show that there was a 14.1% drop in national month-on-month figures for new listings ‘to let’ in April, while properties ‘let’ during the period fell by 9.9%.

Looking at performance across the UK, 11 of the 12 regions recorded by the Property Activity Index reported declines in both new listings ‘to let’ and ‘let by’.

The only region to buck the seasonal trend was Yorkshire and Humberside. Figures for properties ‘let’ sat at a robust 7.1%, the region’s largest increase for April since the index’s first records in 2012.

Regions to record the smallest declines in this month’s index:

Properties ‘to let’

Yorkshire & Humberside -7.5%

Scotland -8.4%

East Midlands -9.9%

West Midlands -10.7%

North East -11.3%

Central England -11.5%

 

Properties ‘let by’

Scotland -3.3%

South East -5.2%

West Midlands -6.8%

Wales -9.3%

East Anglia -9.4%

Central England -11.4%

The largest decline in this month’s index was recorded in London with new listings ‘to let’ falling to -25.6%.

While 2018’s figures did see an unseasonal spike in activity at 10.7%, looking further back we can see that this year’s activity has remained by and large on trend.

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London mayor Sadiq Khan urged to crackdown on short-term letting adverts

May 23, 2019

London mayor Sadiq Khan is being urged to pull advertisements encouraging landlords to move into tourist lets.

Following a significant drop in the number of homes available to rent long-term in the capital, the Residential Landlords Association (RLA) has added its support to calls for Khan to remove the adverts by short-term letting firms Hostmaker from the Transport for London (TfL) network.

Research shows that the number of available properties to rent is plummeting at an alarming rate across some parts of London, and this is placing upward pressure on rents.

According to RLA, listings on the short-term lettings site, Airbnb, increased by 60% to 53,000 listings in the capital in the 12 months to 2017 alone and the popularity of these sites shows no sign of abating.

Laws limit the number of days homes in London can be let on a short-term basis to 90 nights a year to prevent homes being taken from the long term rental market, with Airbnb making a firm commitment to enforcing these rules.

But a recent BBC investigation found Hostmaker was one of a number of companies encouraging people to flout these rules.

David Smith, policy director for the RLA, said: “While people have the right to do what they want with their properties, the movement of homes from the long term to short-term lettings sector is damaging to communities and to the supply of homes to rent for ordinary Londoners.

“The sentiment of these advertisements contradicts the Mayor’s own policy on short-term lettings, and we call for their swift removal.”

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The best buy-to-let hotspots unveiled

May 23, 2019

Private landlords looking for lucrative returns will find that L6 in Liverpool is the most profitable location to buy-to-let in the UK, according to a new online tool.

The ‘Buy-To-Let Hotspots’ tool, which shows the rental yield in 2,463 locations across the UK,  reveals the average annual income a property will generate if rented out, as a percentage of the property’s overall value.

The online tool, created by windows furnishing firm Thomas Sanderson, helps to show where renting out a property can return the greatest yield, ranging from 1.12% to 14.99%.

All users need to do is enter a postcode or the name of a city or town they are interested in finding out the rental yield for and the tool will show the projections for that location and nearby surrounding areas on an interactive map.

The tool uses online property listings to establish the average cost to buy a property and the average monthly rent in each postcode, town or city, and divides the property price by the average monthly rent to figure out the rental yield.

Users are also able to see how their chosen location ranks against the rest of the UK, and shows the best postcodes in terms of rental yield in the region.

The top five most profitable postcodes to buy-to-let in the UK were revealed to be:

1.            L6, Liverpool – 14.99% (rental yield)

2.            SR1, Sunderland – 13.66%

3.            L1, Liverpool – 13.62%

4.            TS2, Middlesbrough – 13.6%

5.            TS14,  Guisborough – 13.19%

 

Conversely, the five least profitable locations to buy-to-let in the UK were found to be:

1.            WC1A, London – 1.12% (rental yield)

2.            TQ8, Salcombe – 1.16%

3.            N18, London – 1.35%

4.            W1J, London – 1.49%

5.            NE18, Newcastle – 1.51%

Richard Petrie, marketing manager for Thomas Sanderson, said: “If you are considering buying a property to let it out, this tool is really useful in showing you where it would be most profitable to do so and give you an idea of what to expect in your chosen location.

“It’s also interesting to see the vast difference in rental yield in different areas of the country, but not that surprising that three of the least profitable locations are in London.”

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Al Rayan Bank launches buy-to-let purchase plan

May 23, 2019

Al Rayan Bank has launched a new limited company buy-to-let purchase plan (BTLPP) for landlords to purchase their investment properties in a more tax efficient way.

The Islamic bank is offering customers a variable rental rate of 3.89%, and a fixed rental rate of 3.99%.

The maximum finance-to-value (FTV) on rent and acquisition products is 75% and 65% FTV on rent-only.

Al Rayan Bank’s limited company buy-to-let purchase plan uses the Islamic finance principles of co-ownership with leasing. Customers purchase the property in partnership with the bank, and monthly payment contributions increase their share of the home.

Maisam Fazal, chief commercial officer at Al Rayan Bank, commented: “Al Rayan Bank has built its reputation on developing innovative Sharia compliant and ethical banking products which meet its customers’ needs.

“The new limited company buy-to-let purchase plan broadens our offering and helps us to ensure we provide a full suite of products for landlords.

“This product will enable UK based landlords looking for an alternative to interest bearing property finance facilities.”

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Buy-to-let landlords continue to enjoy ‘stable returns’

May 22, 2019

Rents across England and Wales have edged slightly higher over the past 12 months, increasing by an average of 0.5% to hit £861 per calendar month (pcm) in March, the latest data from Your Move shows.

The West Midlands overtook the South West as the fastest growing area this month, the data found. The typical rent in the region increased by 4% in the year to April, reaching an average of £641pcm. This was ahead of the South West, which had growth of 3.7% in the same period to hit £701pcm.

Other areas to post strong growth include Yorkshire and the Humber, where prices grew by 2.5% to hit £589pcm, the North West where rents are up 2.3% to £648pcm, as well as the East Midlands where rents have increased by 2.2% over the past 12 months to hit £666pcm.

At the other end of the scale, prices declined in two regions, with rents in London dropping by 1.1%, while the East of England has seen rents decline by 2.2% in the last year, now standing at £874pcm.

London remains the most expensive region to rent property in the UK, with the typical property let for £1,262pcm.

The North East remains the cheapest place to rent, with an average monthly charge of £538pcm.

Once again northern regions offered the highest percentage yields, led by properties in the North East which typically returned 5% to investors, while that figure was 4.8% in the North West.

This contrasts with an average yield of 3.2% in London and 3.3% in both the South East and South West.

The average yield across all of England and Wales was 4.3%, the same as March’s figure but slightly down compared to the 4.4% recorded a year ago.

The data also shows that tenant finances remain relatively healthy, with the proportion of tenants struggling with their finances stood at 9.1% in April, down from 9.4% in March and February, Your Move found.

Martyn Alderton, national lettings director at Your Move, commented: “Across England and Wales there are those areas which are seeing rents rise, and those where they are flat or falling.

“It is the areas which have seen periods of strong growth in recent years, such as London and the East of England, which have dropped back slightly.

“Other areas of the country, including the West Midlands, are starting to catch up and are growing at an attractive rate.

“Regardless of the short-term rent fluctuations the property market remains a great place to invest, with landlords also enjoying stable returns compared to last month.”

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Older investors are ‘recognising the potential of buy-to-let investments’

May 22, 2019

A growing number of older investors are turning to buy-to-let property to supplement their income, new figures suggest.

Fresh data from Commercial Trust shows an uptake in the number of older people applying for buy-to-let mortgages.

The data reveals that there was a 5.43% increase in the proportion of buy-to-let applications last year through the specialist buy-to-let broker by those aged 65-75, compared to 2017 data.

Comparing buy-to-let mortgage applications by age demographics, 25-34-year olds recorded a marginal increase of 0.03%, while Commercial Trust also reported a 4% increase in the proportion of buy-to-let purchases and remortgages from the over 55s, from 2017 to 2018.

Last year, over 55s represented 39% of this buy-to-let activity, having accounted for 35% in 2017.

The numbers were even more marked when considering purchase-only applications; in 2017, over 55s were responsible for 21.7% of this business at Commercial Trust. That figure rose to 29.7% in 2018, an 8% increase year-on-year.

The biggest overall proportion of purchases and remortgages came from the age group 45 to 54, at 27% of all business.

The trend for more, older buy to let mortgage applicants, has been recognised by a number of lenders, who in recent times have increased the maximum age at which an applicant can apply for a buy-to-let mortgage, or the maximum age permitted at the end of the mortgage term.

Santander recently increased their maximum age at the end of the mortgage term criteria from 75 to 85 years old, and the maximum mortgage term on its buy-to-let range from 25 years to 40 years.

Some lenders offer buy to let mortgages with no maximum age at application, while a number of the more established lenders have a maximum starting age of 80 years old.

Precise are happy for those borrowers meeting criteria, to finish the mortgage at 110 years old, while The Mortgage Works sets no maximum age at term end, for experienced landlords.

Andrew Turner, chief executive at Commercial Trust, said: “Our look at the age demographics for 2018 buy to let mortgage activity, suggests that increasing numbers of older people are recognising the potential of buy to let investments.

“Our data indicates that many people, reaching retirement, are choosing to invest in bricks and mortar and the rental market, as a means to fund their retirement years.

“Investing in property has the potential to deliver attractive rental yields and achieve capital growth, despite industry changes. I fully expect that the returns fair better than many other forms of investment.”

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Tougher HMO licencing rules: awareness ‘remains limited’ says agent

May 22, 2019

Six months on from the introduction of licencing that regulates Homes for Multiple Occupation (HMOs), and awareness of the new laws remains limited, according to a leading estate agent.

Lisa Simon, who until recently headed up the letting department at Carter Jonas before becoming head of residential sales, has written a column looking at HMO licensing and the awareness of the recent legislation introduced.

By definition, HMOs comprise at least five unrelated tenants who form at least two households and who share bathroom and/or kitchen facilities. Smaller house shares of three unrelated tenants can also be subject to licencing, according to the jurisdiction of local councils.

She writes: “In the first instance, it goes without saying that HMOs have long since been a fixture of the lettings landscape. From student houses to flat shares amongst young professionals, they are a commonality.

“However, it has come to light that many landlords and estate owners have found themselves responsible for HMOs by circumstance rather than design.”

New HMO legislation has been effective since 1st October 2018, and regulates the safety and standards of HMOs, whether residents are permanent or temporary, short or long-term. But Simon believes that the new rules have “almost gone under the radar”.

Licences can be obtained through the local council, and are likely to be granted if the property in question is suitable for the number of occupants and the landlord is considered to be ‘fit and proper’.

Minimum room standards must comprise usable floor space of more than 6.51sqm if letting a room to a single adult, or usable floor space of more than 10.22sqm if letting a room to two adults.

“It is likely that an HMO licence will limit the number of individuals who can occupy a specific room as sleeping accommodation,” Simon added.

For a licence to be upheld, landlords or managing agents must:

Send the council an updated gas safety certificate every year

Install and maintain smoke alarms

Provide safety certificates for all electrical appliances when requested

Simon continued: “Generally, councils have been user-friendly and will offer guidance on what measures must be implemented for a licence to be granted. That said, councils are at liberty to add other conditions to a licence, such as improving the standard of an individual property’s facilities.

“Indeed, we have witnessed cases in which councils have requested that fire safety is prioritised. In practice, this has included emergency lighting, smoke alarms and fire doors. Meanwhile, other examples have involved the installation of more bathrooms.

“If an application for an HMO licence is declined, there is scope to appeal to the First-Tier Tribunal, albeit this incurs an additional fee set by the relevant council.

“Legally, councils can carry out spot checks and enforce an unlimited fine for failure of compliance, so due diligence is recommended. We are aware of two examples in which penalties were particularly acute, with one landlord in Brent, Greater London, who was fined £30,000 plus costs for letting an undersized room. Meanwhile, another landlord in the West Midlands was fined £180,000 for letting four unlicensed HMOs.

“But by no means should the legislation result in panic; if you’re unsure or think you might be responsible for an HMO, the best course of action is to seek professional advice at the first opportunity and tackle the issue head on.”

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Landlords and tenants left in limbo as agency suddenly shuts owing thousands

May 22, 2019

An estate agency in the West Midlands has shut down leaving clients demanding their cash.

Landlords and tenants who dealt with the company, which had an office Kingswinford, Dudley, and another in Wolverhampton, were given no prior warning that the firm was planning to close down.

Landlords and tenants who used Holmes estate agents’ services are now demanding to be paid back their deposits and rent.

Former tenant Sharon Lees told the press that she is still waiting for the £900 deposit she paid when she took up a tenancy with Holmes for a property in Sedgley.

She rented from October 2016 to March 2019, and when she requested the return of her deposit, she was told it would be sent to her by post.

Her deposit has not arrived and the worried school worker has been repeatedly calling and emailing the company without success.

She told The Shuttle: “I haven’t got a clue what to do next, I don’t know what the next step is.

“I just hope that they don’t it to anybody else. We are hardworking, dependable people who trusted them.”

 

Landlords who used the company are also worried, as tenants paid rent to them through the agency. 

James Robinson, who has been a landlord in Kingswinford for 15 years, says that he is owed £4,032 in rent over a period of eight months. He has been chasing the company but they have not returned his calls or emails.

He said: “It’s really worrying, but what can you do?"

Aside from landlords and tenants, several contractors who carried out work for the company are also worried their outstanding costs will not be paid.

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Masthaven revamps buy-to-let range

May 22, 2019

Masthaven has announced changes to its buy-to-let mortgage range, including flexible criteria, rates for non-traditional tenants and landlords, as well as complex properties.

The new proposition, aimed at individuals, professional landlords and limited companies, comprises of three products, including specialist standard product with two- and five-year fixed rate options up to 75% LTV starting from 3.09%, reduced from 3.14%, with a maximum portfolio limit of up to eight properties and a maximum value of £2m with Masthaven. This product takes into consideration those with failed credit scoring, and allows gifted equity from family.

There is also a specialist property product with two- and five-year fixed rate options up to 70% LTV starting from 3.63%, which is designed to take into account more complex properties including HMOs with up to ten bedrooms, flats up to 20 floors and retirement properties.

In addition, there is a specialist product with two and five-year fixed rate options up to 70% LTV starting from 3.89% catering for both non-traditional tenants and landlords. Holiday lets, including Airbnb, are permitted and applicants will be able to remortgage with less than six months’ ownership.

Matt Andrews, managing director of mortgages at Masthaven, commented: “The rental sector has undergone some big changes over the last few years and some landlords and tenants have felt the strain. In a bid to support the market, we wanted to create a product range that offers brokers access to products that meet market needs.

“We want to offer products that suit UK borrowers. As mortgage requirements change, the industry must offer affordable and flexible options that keep up with modern life.

“We listened carefully to our brokers and believe our new range will support their clients’ needs.”

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Growing number of English landlords investing in Scotland’s BTL sector

May 21, 2019

There has been a notable rise in the number of English landlords investing in Scotland’s buy-to-let sector thanks to cheaper property prices north of the border, along with tax reliefs and higher yields, according to Touchstone.

Research by the property training firm found that 78% of its clients believe the best buy-to-let investment opportunities currently exist in Scotland.

In contrast, half of respondents - 50% - said they intend to target London’s buy-to-let market, while 53% opted for the South East and 49% for the South West of England.

Touchstone identified increasing rental yields north of the border as a primary reason as to why more people are investing in Scotland’s housing market.

The average rental yield returned to investors with property in Scotland has increased for the first time since March 2017, Your Move Scotland has found.

Fresh data from the letting agency reveals that the average rental property north of the border generated a return of 4.7% for its owners in March, higher than the 4.6% recorded a month earlier.

Consequently, landlord returns in Scotland are now at a six-month high. This is in contrast to England and Wales, where yields have held steady at an average of 4.3%.

Touchstone’s chief executive, Paul Smith, commented: “Central Scotland is now the focus of a great deal of activity. Edinburgh has always provided consistent returns, but Glasgow is now the city that’s setting the pace.

“There’s a great deal of excitement about its growing tech, creative and financial services sectors which are attracting young, affluent workers from elsewhere in the country.

“The main exception in Scotland is, of course, Aberdeen whose property market continues to be negatively affected by the downturn in the oil and gas industries.”

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Londoners on housing benefits are ‘treated like second class citizens’

May 21, 2019

Renters in London are being discriminated against ‘because they are on benefits’, according to ITV News London.

ITV News reporter Katie Barnfield interviewed a number of tenants on housing benefits and found that many are struggling to secure accommodation in the capital.

As part of Barnfield’s research, she called 50 letting agents across the capital asking about two bedroom properties, whilst pretending to be in receipt of housing benefit.

“I was asking about the cheapest properties available in each area - and yet, hardly any were available at all,” she said.

Out of every agent she called, Barnfield found just four properties where the landlord would even consider a benefit claimant as a tenant.

Just one landlord would consider her without a guarantor.  

Barnfield commented: “One of them [agent] told me I'd need a guarantor earning £43,000 year to rent a property which cost just £1,100 a month.”

She added: “One estate agent told me they hadn't had a property on their books which was available to a benefit claimant in seven years. Another said about a particular landlady: 'even if you were the Pope and you were on benefits, she wouldn't rent to you’.”

Mary Wilde is just one of those benefit claimants who have struggled to find a place to live. She was told to pay more than £6,000 in rent and fees upfront, because she couldn't find a guarantor earning over £28,000. She says she felt pressured to pay, because she could not find anywhere else available to her.

She said: “We are treated like second class citizens. As soon as you mention benefits, people's whole attitude changes towards you. It's not fair and it needs to stop. People aren’t being given a chance.”

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Landlord ordered to behave himself after being abusive towards tenant

May 21, 2019

A BTL landlord who lost his cool during a heated exchange with a tenant over unpaid rent has been ordered to be of good behaviour for the next nine months at Jedburgh Sheriff Court.

Steven Melville, 53, pleaded guilty to behaving in a threatening or abusive manner by shouting and swearing and struggling with his tenant, William Harley, during the incident in Hawick, Scotland, in February last year.

The court heard that Harley was taking his car out of the garage when Melville appeared asking where his rent money was.

A fight broke out between the pair and the incident was reported to the police.

Defence lawyer Ross Dow said his client was owed £700 in unpaid rent by the tenant.

He said: “Even when he [the landlord] stumbled across him [the tenant] he dismissed him even though he said please to begin with.

“When the complainer replied he couldn’t pay him a struggle developed.

“The complainer put his hands on him and he pushed his hands away. It was a very minor struggle.”

The tenant has now moved out of the rented property but apparently left the flat in a state of disrepair, while the landlord had to write off £1,000 in unpaid rent.

Sheriff Mungo Povey commented: “I have listened to what has been said on your behalf and I am prepared to defer sentence for nine months for good behaviour.”

The Sherriff added that if Melville was of good behaviour then he would be admonished when the case recalls on 3 February 2020.

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Retirees urged to consider renting in retirement rather than take equity release

May 21, 2019

It may actually make more financial sense for older people to rent rather than withdraw equity from their properties, according to Girlings Retirement Rentals.

Fresh research shows that there has been a sharp rise in the number of over 55s taking equity release from their homes, but this may not necessary make financial sense, the retirement rental specialist, owned by the Places for People Group, suggests.

The Equity Release Council recently reported that almost £1bn was withdrawn by over-55s through equity release in the first quarter of this year, up 8% year-on-year.

The industry body for the equity release sector said 20,400 customers borrowed against their homes, with the average customer taking out a lump sum of £97,763 to fund everything from home extensions to helping grandchildren get on the property ladder.

But Jamie Turnbull, business director of Girlings Retirement Rentals, points out that whilst equity release suits some people, there are alternatives such as downsizing and renting which could make people financially better off.

 

 

A recent study from Retirement Villages highlighted that more than half - 55% - of over-55s said they would consider renting a home and 48% would rent with a friend.

Turnbull said: “We have seen a year on year increase in the number of people choosing to sell their family home to downsize and rent, instead of buying. One of the main benefits is to have access to all their capital without paying interest, like many people have to do when taking out equity mortgages.”

According to the advice website MoneySavingExpert the typical interest rate for a ‘lifetime mortgage’ – the most popular kind of equity release – stands at 5.1%, significantly higher than that of most standard mortgages.

Turnbull continued: “By selling up and renting people can choose to invest and earn money on their savings, as well as have a lump sum to spend on things like home improvements or helping family. Obviously with renting there are no stamp duty costs either.

“Often when people rent they can plan their finances more carefully as they know what their monthly outgoings will be, plus there are no surprise bills, which can crop up for upkeep and maintenance when people own their home. The main barrier to renting in our experience is security of tenure. However with most of our properties coming with assured or ‘lifetime’ tenancies this doesn’t need to be an issue.

“Renting enables people to downsize to a more manageable sized property, release capital, save on bills and enjoy additional benefits such as access to a ready-made community and services they may need when they are older. They can then just get on with enjoying their retirement.”

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Accord Buy To Let launches new range of 80% LTV products

May 21, 2019

Accord Buy To Let has launched a new range of 80% loan-to-value (LTV) products, designed to give landlords with smaller deposits greater choice.

The lender is now offering nine products for landlords looking to purchase a new property or remortgage an existing one with a 20% deposit.

Rates on the new 80% LTV range start at 3.49% for a two-year fixed rate deal, which for house-purchasing comes with free valuation, £500 cashback and a £950 fee.

A five-year fixed rate mortgage with free valuation, £500 cashback and a £950 fee is also available for landlords looking to add to their portfolio at a rate of 3.69%.

Accord will lend up to £500,000 on mortgages up to 80% LTV.

Toni Roberts, product manager at Accord Buy To Let, commented: “In what is a limited market we’re pleased to offer landlords more options at 80% LTV.

“The competitive two and five year fixed rates come with a variety of set-up options to ensure brokers have a choice of mortgages that best meet their client’s needs, be that with or without upfront fees or incentives depending on their circumstances.

“We’re also really pleased to be able to lend on this new range up to £500,000, which is competitive for this LTV.”

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Almost four in ten landlords will consider selling up if Section 21 is axed

May 20, 2019

Nearly four in ten private landlords will consider selling up if the government scraps Section 21, shocking new statistics reveal. 

According to a survey carried out by Landlord Action, 38% of buy-to-let landlords will consider offloading properties if the government axes Section 21 repossessions – so-called ‘no fault’ evictions. A further 33% said they would only continue being a landlord with significant changes to Section 8.

The study also found that 70% of landlords would be less willing to consider a longer-term tenancy if Section 21 was no longer available to them, while 85% said they would be more selective with their choice of tenant. 

“If this was the case [that Section 21 was scrapped], the government’s efforts could end up being counter-productive and harming the most vulnerable tenants” said Paul Shamplina, founder of Landlord Action.

Shamplina has written to the housing minister, Heather Wheeler, inviting her to gain a greater understanding of the possession process before making drastic reforms.

Encouraging longer tenancies will only be possible with major investment in housing courts to help speed up evictions, according to Shamplina.

He added: “It currently take 22.8 weeks from gaining possession to issuing a claim for eviction, and clarification regarding new grounds within Section 8 to protect landlords.

“It is clear from our survey that with so many other obstacles already faced by landlords, such as the introduction of more regulation, the reduction in the tax relief that landlords can claim on mortgage interest and a 3% stamp duty surcharge on buy-to-let properties, there is a real possibility of the buy-to-let market significantly shrinking over the next five years meaning higher rents for tenants.”

A separate survey by the Residential Landlord Association’s (RLA) which asks what a post-Section 21 private rented sector should look like has already attracted more a record number of landlords.

For further information, click here

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The Tories have lost the trust of BTL landlords

May 20, 2019

With less than a week until the European elections take place, a new poll conducted by the National Landlords Association (NLA) suggests that private landlords have lost faith in the Conservative party, with just one in six - 15.75% - now saying they would support them in a general election.

The research found that more than two thirds - 69% - of the landlords responding had voted Conservative in 2017. But of those, just a quarter - 25% - said they would do so again were an election called today.

Meanwhile, 85% of landlords stated they would be likely to vote against any party proposing to remove Section 21 and 89% would vote against any party proposing rent control.

Richard Lambert, CEO of the NLA, commented: “It’s hardly surprising that landlords are losing faith in the Conservatives given the way their Government has overturned the economic, and now legislative, foundations of the private rented sector since 2015.

“The Tories’ attitude seems to be “Well, who else are landlords going to vote for?”  The response is coming back loud and clear, “Not you”.”

He added: “Our members have told us that removing Section 21 would be devastating and costly for their businesses. Conservative Ministers need to take the time to understand what’s actually happening in the private rented sector or it may end up costing them dearly.”

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BTL landlord ordered to pay £1,600 for leaving tenants in ‘cold and scruffy’ flat

May 20, 2019

A buy-to-let landlord in Nottingham has been ordered to pay just over £1,600 for allowing five tenants to live in what has been described as a ‘cold and scruffy’ flat on Mansfield Road, NG1, which was in defiance of a council order.

Aside from a lack of heating, the tenants were also provided with an under-sized bathroom, missing stair rails and a leaking roof that allowed rain to enter the property.

Ashok Bharadwaj, 69, was handed a £1,606 bill after city magistrates heard that he defied a prohibition notice issued by Nottingham City Council that banned him from allowing people to stay in the property there until repairs were undertaken.

This was imposed in October 2017 but tenants were found to be there almost a year later with the building still in the same state.

Bharadwaj claimed he had been helping the homeless.

However, Sarah Mills, prosecuting, told the court: "Whether someone is in need of shelter, it is unsafe and that is why it is prohibited."

She added: “There were hazards for amenities for personal hygiene, sanitation and drainage and an under-sized bathroom on the second floor.

“Remedial works had not been completed. The central heating had not been connected to the gas and the bathroom had not been re-sited or extended.”

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The National Approved Letting Scheme -NALS- rebrands as safeagent

May 20, 2019

When it comes to letting a property, it is important that landlords and renters have faith in their agent.

 

To many renters, transparency means fairness. The more open and honest an agent is, the less likely they are to waste the time of clients.

 

But while most agents do a good job for their clients, ensuring that property transactions go as smoothly as possible, there remains a lack of trustworthiness in agents as far as some people are concerned, caused partly by poor practices by some agents and a handful of unscrupulous firms, which are giving the industry a bad reputation.  

 

However, despite the reckless behaviour of some rogue operators, the battle for high standards in the industry continues.

 

Among those trying to make the private rented sector a better, safer place for all in recent years is The National Approved Letting Scheme (NALS), which has just rebranded as safeagent.

 

NALS, a not-for-profit accreditation scheme for agents, has helped coordinate the safeagent campaign since 2011, focussed on achieving mandatory Client Money Protection (CMP) for all lettings and management agents.

The safeagent name has proved popular with agents, as a readily recognisable mark for consumers to look for.

 

The newly rebranded safeagent will continue to operate in the private rented sector, acting as an accreditation scheme for letting and management agents.

 

The majority of NALS Firms are already safeagents, and the only difference is the use of one logo.

 

safeagent Awareness Week, which has been running for the past six years, will be from 17-21 June 2019.

 

Isobel Thomson, chief executive of safeagent, said: “It's a pivotal time for the private rented sector. There have been many changes, and many more are in the offing, but we do know what makes a safeagent. In a crowded, sometimes confusing marketplace, safeagent remains an easily identifiable mark of trust for consumers in an agent's professionalism and the security of their money.

 

“This is an exciting time for safeagent, a fresh look, with exciting plans for the coming months. We will maintain safeagent's consumer focus, while also continuing to champion the cause of our professional accredited agents who uphold the highest standards of professionalism.”

 

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Coventry for Intermediaries expands buy-to-let criteria

May 20, 2019

Coventry for Intermediaries has enhanced the number of buy-to-let mortgages permitted with the group from three to five, doubled the maximum aggregate loan limit allowed on all rental properties from £1m to £2m, increased the maximum loan amount at 50% to 75% loan-to-value (LTV) from £500,000 to £750,000, while also improving the income threshold for 125% interest cover ratio from less than £42,500 to less than £49,000.

In addition, the society has introduced a mortgage range aimed specifically at BTL landlords with four or more mortgaged buy-to-let properties in total, either together or separately.

Kevin Purvey, director of intermediaries at Coventry Building Society, commented: “We’ve made these changes so that brokers can bring more of their buy-to-let clients to us, and benefit from the simplicity that we bring to the market.

“Our offering for portfolio landlords is particularly straightforward. We don’t ask portfolio landlords for a business plan; instead, there’s just one portfolio document to complete which allows us to underwrite the case immediately. And our new range of products specifically for portfolio landlords further supports the proposition.”

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Middle-aged renters on the rise

May 17, 2019

Rising UK house prices have left many middle-age workers unable to afford a first home, or as accidental renters after a relationship break-up, which is why significantly more older tenants are now renting from a private landlord than they were a few years ago.

Given that there is now more of a focus on supporting young first-time buyers, many older tenants now risk being ignored, which may partly explain why Grainger has seen a notable rise in the number of people in their thirties and forties embracing renting.

Helen Gordon, the head of Grainger which is the UK’s largest listed residential landlord, says that her firm has seen a rise in the number of renters aged between 35 and 44, especially in London.

She told the press: “That is partly because our flats are seen as an attractive alternative to people priced off the housing ladder. But, there has also been a mindset change in society: not everyone feels the need to own anymore.”

Grainger, which operates around 8400 rental homes, plans to develop 8,200 more properties to cater for growing demand from renters.

Research commissioned by Intus Lettings earlier this year found that there had been a 15% rise in the number of people renting a home aged 35-54 in the last three years as they struggle to get a mortgage.

The study also revealed that just under a fifth of renters over 55 believe that they will ever be able to afford to buy a property.

Reasons noted in the survey included general affordability and problems getting a mortgage due to age.

Hope McKendrick, lettings manager at Intus Lettings, said: “With the cost of rent rising faster than wages, it’s no surprise that an increasing number of people find themselves unable to save up for a deposit to buy a home well into their 40s, 50s and beyond.

“The survey results revealing that a large proportion of older renters don’t believe they’ll ever be able to buy a home is a particularly worrying trend, as only around one-in-five middle-aged tenants feel renting actually suits their lifestyle.”

McKendrick added: “Given that nearly half of renters aged between 35 and 54 live with their children, the pressures can mean added stress for parents and families.”

 

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Record response to new survey on Section 21

May 17, 2019

A record number of landlords have responded to the Residential Landlord Association’s (RLA) survey asking what a post-Section 21 private rented sector should look like.

The survey, which went live just days after the government announced plans to axe Section 21 repossessions – so-called ‘no fault’ evictions – last month, has already attracted more than 6,000 respondents.

The RLA is inviting landlords to share their experiences of regaining possession of properties – and asking what assurances they need to continue to stay in the sector and provide the homes to rent that are so desperately needed.

The responses will be used by the RLA as the basis for its response to the government’s formal consultation when it is launched.

David Smith, policy director for the RLA, said: “The scale of responses to this important survey shows the strength of feeling in the sector.

“The RLA argues that it is vital landlords are confident that they can swiftly and easily repossess a property for legitimate reasons such as rent arrears, anti-social behaviour and needing to sell the property.”

Smith added: “The survey closes Monday, and we would encourage all those who want the opportunity to have their say and shape the future of the sector to take the time to respond.”

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Buy-to-let mortgage lending drops 9.1%

May 17, 2019

Buy-to-let mortgage activity remained sluggish in March with landlord investors taking out just 5,000 new buy-to-let home purchase mortgages, down 9.1% on the same month last year, according to the latest data from UK Finance.

The figures also reveal that there were 14,400 remortgages in the buy-to-let sector, 3.9% more than in the corresponding period in 2018, with buy-to-let remortgaging increasing year-on year for the second consecutive month.

“The number of landlords adding to their portfolios, or investing for the first time, has inevitably fallen again due to the tough tax and regulatory changes which have hit the sector,” said Mark Harris, chief executive of SPF Private Clients.

Since 2016, the number of new buy-to-let mortgages issued by banks has dropped by over 50% and this trend is unlikely to change any time soon, according to Simon Heawood, CEO and co-founder of Bricklane.com.

He commented: “A swathe of tax penalties in recent years means more and more part-time landlords are deciding that buy-to-let just isn’t worth their while.

“The upcoming Tenant Fees Ban also appears to be the opening salvo in a push to professionalise the rental market. Those who remain can expect to face increased costs and hassle.”

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Welsh Renting Homes -Fees etc.- Bill receives Royal Assent

May 17, 2019

The ban on fees charged by landlords and letting agents in Wales will be introduced in September, after it received Royal Assent.

From 1 September 2019, agents and landlords will no longer be able to charge fees to set up, renew or continue 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 introduced – possibly later this year.

The Bill means that it will be illegal for landlords and letting agents to charge anything other than permitted payments, which are: rent, security deposits, holding deposits, utilities, communication services, council tax, green deal charges and default fees.

Under the new Act, holding deposits will be restricted to one week’s rent with provisions that ensure their prompt repayment.

The announcement comes just two weeks before the Tenant Fees Act comes into force in England, on 1 June.

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Questions raised about letting agents in England and Wales

May 17, 2019

Consumer organization Which? recently undertook a mystery-shopping exercise at 20 letting agents in England and Wales and unearthed some disappointed results, including potential breaches of consumer law.

Five lettings agents required financial commitments before allowing customers to see contracts

One quarter of agents surveyed would only allow prospective tenants to view contracts once they had provided a financial commitment or a holding deposit and some of these further required a reference check to be undertaken (at the customer’s expense) before allowing them to see the contract.

Concerningly, three of these lettings agents were members of ARLA Propertymark.

Which? believes that the actions of these lettings agents could put them in breach of consumer law as they could make it difficult for tenants to shop around (due to the cost of doing so) and hence potentially limit their purchasing options and hence their ability to make an informed decision as to whether or not the contract in question is the right one for them.

A further lettings agent was prepared to provide a contract, but required the customer to visit their office to read it on-site. Which? believes that this behaviour could also be illegal by placing the customer under pressure to read the contract quickly, although in this instance the counter-argument could be made that it gave the customer the opportunity to ask questions and to clarify any points of confusion in the contract.

The wording of contracts was considered to be highly questionable

At this point it has to be recognized that drawing up legal documents is a complex process, even in the case of fairly standardized documents such as residential tenancy agreements.

It also has to be acknowledged that it can be extremely difficult to strike an appropriate balance between including enough detail without confusing the reader (given that the average customer at a lettings agent is unlikely to be a legal expert) and leaving sufficient flexibility to allow for different situations and changing circumstances (this will become especially relevant if the government does introduce three-year minimum tenancies).

This reality could give lettings agents some defence against the findings that some contracts were unreasonably vague. Sadly, Which? discovered that some contracts were not (just) vague but contained stipulations which were of questionable legality, for example some lettings agents required tenants to inform their lettings agent or landlord that they intended to switch utility tariffs and some even required the tenants to seek the permission of their lettings agent or landlord.

In law, tenants must be free to change utility supplier if they so wish. Again, however, Which? has not provided clarity as to why these clauses were put in place. It could simply be that lettings agents and landlords want to keep tabs on what is happening in the property so they know who to contact if they need to, e.g. if the tenant unexpectedly leaves the property without paying their rent.

Mark Burns is the managing director of Indlu estate agents in Manchester 

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Inventory provider anticipates a surge in tenant activity next month

May 16, 2019

Landlords and letting agents are being urged to prepare for a significant increase in tenant activity from the start of next month.

No Letting Go believes that many tenants will be looking to move after the Tenant Fees Act officially becomes law on June 1 in order to avoid paying upfront fees and benefitting from capped security and holding deposits.

The inventory provider’s prediction follows on from recent research from The Deposit Protection Service (DPS) which suggested that tenants could be delaying moves between rental properties until the ban of tenant fees comes into play next month.

The study found that rents dropped during the first quarter of 2019, with the average rent across the country during the first three months of the year falling to £757 per calendar month, down £14, or 1.9%, from the corresponding period last year.

The DPS said that the marginal decline in rents is largely owed to a range of economic factors alongside a period of 'tenant inactivity' ahead of the fees ban.

Nick Lyons, CEO and founder of No Letting Go, said: “It’s no surprise to see shrewd tenants delaying moves until after the fees ban and deposit caps are introduced on June 1," says Nick Lyons, CEO and Founder of No Letting Go.

“The upfront cost of moving between rental homes can be high - particularly in London and the South East - so renters will do anything they can to keep costs down, even if that means putting their move on hold for a few months.”

He added: Tenants are likely to have continued searching for properties over the last few months and will be keen to push their moves through as quickly as possible so they can be settled in their new property for the majority of the summer months.”

No Letting Go also reminds landlords that when the five-week deposit cap comes into force, the presence of an independently compiled inventory will become even more valuable towards protecting their investment.

Lyons continued: “Inventory reports confirm the condition of a rental property at the beginning and end of a tenancy. The presence of this document provides landlords with the evidence to make fair deductions for damage and lost items.

“With the fees ban likely to reduce average deposits in some areas, it’s vital that landlords have peace of mind that their property is protected by an inventory that can support them in the event they need to make deposit deductions.”

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New post-Brexit Right to Rent guidance issued by the government

May 16, 2019

New guidance on Right to Rent checks for EU citizens after Britain leaves the European Union has been published by the government to help landlords, homeowners and letting agents carry out correct checks and avoid civil penalties.

The advice on the controversial Right to Rent scheme, which requires landlords in England to check the immigration status of their tenants, is designed to prepare landlords who rent to EU citizens in post-Brexit Britain.

Given that two thirds of all EU nationals in the country currently live in private rented housing, the guidance about their status has been a long time coming.

Landlords and letting agents have been informed that they should continue to undertake Right to Rent checks on EU, EEA and Swiss citizens in the same way as now, usually by checking and making a copy of an EEA national’s passport or identity card, until 1 January 2021.

Read the Right to Ret guidance by clicking here

A recent High Court Judge ruled that the Right to Rent scheme breached the European Convention on Human Rights on the basis that it led to inadvertent discrimination against non-UK nationals with the right to rent.

The RLA’s most recent research suggests that around a fifth of landlords are less likely to rent to nationals from the EU or the European Economic Area as a result of the Right to Rent, a figure the RLA warns could increase after Brexit.

David Smith, policy director for the RLA, commented: “Landlords are not border police and cannot be expected to know who does and who does not have the right to live here.”

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Landlords ordered to pay more than £6k for HMO failings

May 16, 2019

A buy-to-let landlord has been ordered to pay more than £6,000 in relation to 12 charges under the Housing Act after council officers found numerous breaches of regulations at a house in multiple occupation ( HMO ) ranging from defective windows to failing to produce a gas safety certificate.

Mahmut Gilgil, of Blandford Road, BH15, was convicted of a series of failings at the HMO, located above a kebab shop on the same road.

The breaches, carried out between April and May last year, saw Gilgil, 42, convicted of the offences at Poole Magistrates' Court last week.

The landlord had failed to repair a holed plaster board to the required 30-minute fire resistant standard, replace ill-fitted lino, replace a broken light in the bathroom, clear vegetation from the gutters, reconnect a rainwater downpipe, display his details, or provide a gas safety certificate for the flat.

In addition, there were defective windows inside the property, while Gilgil had failed to repair loose, missing and slipped slates on the roof, replace missing furniture and apply draught proofing.

The landlord was fined £2,750 and ordered to pay a £30 surcharge and £3,425 costs.

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Man denies posing as a landlord in a deposit scam

May 16, 2019

A man in Dundee has denied that he fraudulently pretended to be a landlord who asked for an up-front deposit from tenants to secure a property that he did not own.

Edward Laing, of Back Dykes, Auchtermuchty, rejects accusations that he falsely obtained more than £2,000 by claiming to be a landlord.

Lang allegedly told people that he was the landlord and that he was allowed to advertise and rent out a property on St Vincent Street, Broughty Ferry, Dundee, and was in a position to provide the occupancy rights once he had received payment.

The 36-year-old is accused of persuading four people to transfer him £450 between May 16 and June 23 last year which they believed was a deposit for the property.

Laing also denies convincing another rental applicant to pay a first month’s rent and deposit amounting to £950.

Laing will appear at Dundee Sheriff Court in August.

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BTL mortgage specialist sees record first quarter

May 16, 2019

Charter Court has reported a record first quarter with new loan originations of £710m, up from £668m during the corresponding period a year earlier, thanks to strong performances across core buy-to-let, residential and short-term mortgages.

The buy-to-let mortgage specialist grew its loan book 17.9% year-on-year to £6.5bn from £5.5bn in the corresponding period last year, or 28.1% to £7.1bn excluding the impact of structured asset sales in the quarter.

Ian Lonergan, chief executive of Ian Lonergan, which is in the process of a £1.6bn merger with OneSavings Bank, commented: “I am pleased to report another strong quarter as we continued to deliver on our robust mortgage pipeline to generate record first quarter originations while maintaining high asset quality and strong credit performance.

“Despite a challenging macroeconomic and market backdrop, the group completed the sale of its residual interest in two securitisations in January for a pre-tax gain of £30m.”

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Prime central London rental market proving resilient

May 15, 2019

The rental market in prime central London has proved resilient this year despite the impact of political uncertainty surrounding Brexit negotiations, according to fresh analysis.

 

In the first quarter of this year, rents increased by 0.2% for renewals, whilst relets rose by 0.1%, the data from London Central Portfolio (LCP) shows.

 

The figures also reveal that voids - calculated from the day a property falls vacant to when a new tenant is installed - stand at just 31 days. Occupancy is currently running at 94%.

 

The tenant mix is primarily international with less than 20% from the UK. Despite fears of a mass exodus following the Brexit vote, citizens of the EU 27 still account for more than 40%.

As far as the landlord profile is concerned, Asia dominates overseas investment, making up 68% of all landlords.

More than 50% of tenants are from the financial sector, and whilst the majority are employed predominantly in the City or Canary Wharf, many want the “PCL experience”.

The second biggest sectors are Professional Services and HNW Students.

The popular areas of Mayfair and Knightsbridge still command the highest rents per annum, with an average of £60.49 sq ft.

Kensington, South Kensington and Marylebone lead the rest at £48.32 sq ft.

Naomi Heaton, CEO of LCP, said: “Despite the multitude of external factors currently crippling the sales market, the rental market is proving to be more stable. Q1 saw rents increase slightly over the quarter for both renewals and re-lets by 0.2% and 0.1% respectively. Annually, renewals are up 0.4%.

“As a rule, rents are correlated to the cost of purchasing a property. With continuing low borrowing costs and prices falling, we would not expect much upward movement. On top of this, landlords remain concerned about Brexit, putting tenants into a strong negotiating position.

“Nevertheless the average length of tenancies is increasing, standing at 455 days in 2018 and the anticipated exodus of citizens from the EU27 following the Brexit vote has not materialised. They currently account for over 40% of the tenant base which is primarily international, with UK tenants making up under 20%.

“Not surprisingly, the financial sector and millennials represent the biggest proportion of tenants. The continuing trend is for renting smaller units as budget conscious tenants prioritise prime locations over size. Consequently one bedroom flats and smaller units return better yields than their larger equivalents. Clever space optimisation and stylish interiors are becoming ever-more demanded.”

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Housing Hand launches new rent guarantor scheme

May 15, 2019

Housing Hand has launched a new rent guarantor scheme to help tenants secure accommodation.

Research by Housing Hand shows that there has been a significant increase in the number of applicants for a guarantor of late, with student applications in particular increasing sharply, owed in part to the fact that rents are rising.

With rising rent prices and deposits, many would-be renters simply cannot afford to put down several months of rent upfront, which is why Housing Hand has launched a service that allows the firm to stand as a tenant guarantor, deigned to encourage landlords to rent to a wider pool of secured tenants. 

Jeremy Robinson, group managing director, Housing Hand, commented: “The requirement to pay such large amounts upfront is often dropped if the renter can provide a guarantor for their rent. However, this is often yet another challenge for many of those looking to rent a home in the UK. This is where Housing Hand steps in to help.

“The company provides a rent guarantor service to students and working professionals, helping them to reduce the upfront costs of renting a home. Those coming to the UK from overseas to work or study can also access the scheme, as can workers on zero hours contracts.”

Tenants can take advantage of Housing Hand’s guarantor service, with the option of instalments spread over several months or making a single payment from £295.

Housing Hand then liaises with the landlord, letting agent or university in question to make the relevant arrangements.

Robinson added: “Moving into your own home should be an exciting milestone. We are doing what we can to ensure that people can achieve that dream in the face of increasingly difficult circumstances.”

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HMO drop-in events to be held in Manchester

May 15, 2019

Manchester City Council will hold a couple of HMO drop-in events over the next few days for private landlords and letting agents who let out HMO properties in the city.

The events, which will be held at Moss Side Powerhouse Library on Thursday 16th May, 3–7pm, and Abraham Moss Library on Wednesday 22nd May, 2–7pm, are designed to help HMO landlords understand the new rules and changes to HMO licensing.

Since 1 October last year, those who let property to five or more unrelated people who share amenities have been required to obtain a licence in order to continue operating and comply with legislation.

It is estimated that around 160,000 properties nationwide have been affected by the new rules governing HMOs, which also affect the size of the rooms in your tenant’s property; HMOs must now have bedrooms of at least 4.64sqm for children aged ten or under, at 6.51sqm for single rooms and a minimum of 10.22sqm for two adults sharing.

Many landlords will not be affected by the minimum room rule – the idea of it is to clampdown on those landlords who are crowding too many people into small rooms, are housing illegal Immigrants and are not meeting health and safety standards.

Manchester City Council Drop-in events will be held on:

Thursday 16 May, 3–7pm Moss Side Powerhouse Library, 140 Raby Street, Moss Side, M14 4SL

Wednesday 22 May, 2–7pm Abraham Moss Library, Crescent Road, Crumpsall, M8 5UF

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LendInvest introduces new BTL deals and reduces rates

May 15, 2019

LendInvest has introduced a range of new buy-to-let mortgage products, in addition to reducing rates on select offerings.

New buy-to-let rate deals include a five-year fixed mortgage product at 75% loan-to-value (LTV) which is available at 3.6%, while the 75% LTV five-year fix remortgage offer is on offer at 3.49%.

Both deals come with no product fees, but the maximum loan size is capped at £250,000.

LandInvest has also cut rates on select products, including the 80% LTV two-year fix at 3.69%, which has been reduced to 3.59%, as well as the 80% LTV five-year fix at 3.89% which has been cut to 3.69%.

Ian Boden, sales director at LendInvest, said: “As our internal processes continue to evolve; streamlining both our origination and loan management systems, we can increasingly offer our borrowers more competitive rates in the long term.

“These products will directly benefit our borrowers’ wishing to grow their business by enabling them to leverage and release capital for further property investment.”

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TSB reduces remortgage rates

May 15, 2019

TSB has made selected rate changes to its buy-to-let and residential range, including cutting three- and five-year fixed remortgage products at up to 75% loan-to-value (LTV) by 0.1%.

The reduction of up 0.1% is combined with free legals or £300 cashback on its remortgage range.

“TSB continues to offer some of the most competitive deals on the market,” said Nick Smith, head of mortgages at TSB.”

The lender launched a new range of buy-to-let remortgage products last month, with rates starting from 1.59%.

There are two-, three- and five-year products available.

Two-year fixed rate deals start from 1.59%, available at up to 60% loan-to-value (LTV) and 1.84% up to 75% LTV.

Fee-free products are available at 2.29% at 60% LTV and 2.54% up to 75% LTV.

Three-year fixed rates start from 1.79% up to 60% LTV with a £1,995 fee or 2.29% fee-free.

Between 60% and 75% LTV rates start from 2.19%, increasing to 2.69% with no fee.

Meanwhile five-year remortgage rates start from 2.09% up to 60% LTV or 2.39% fee-free, and between 2.44% and 2.74% up to 75% LTV.

TSB has also cut selected existing buy-to-let products by 0.1%.

Smith commented: “TSB is committed to helping customers to borrow well and the introduction of our new buy-to-let products with a £300 cashback offer or free legal fees is another step to helping landlords do just that.”

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RLA welcomes MP’s pledge to fix court system before Section 21 is scrapped

May 14, 2019

The Residential Landlords Association (RLA) has welcomed the housing minister’s pledge to make changes to the courts to speed up the ability of landlords to repossess properties for legitimate reasons.

Data from the Ministry of Justice reveals that the average time for a private landlord to make a claim to the courts to repossess a property to it happening was 17.3 weeks in the first quarter of 2019, which is a week longer than it did in the final quarter of last year.

These figures are based on the government’s preferred median measurement.

With ministers pledged to abolish Section 21 ‘no fault’ repossessions the RLA is arguing that the court processes must first be fixed to ensure landlords are not unduly frustrated when wanting to reclaim their property in the face of tenants failing to pay their rents or committing anti-social behaviour, which is why the association has welcomed the minister’s vow to reform the courts to support landlords.

Writing for the RLA, Heather Wheeler said that: “landlords who experience the eviction process via the courts” often find it “unduly slow and complex”.

She pledged that “changes in the law, the court process, and resourcing will need to go hand in glove with tenancy reform, to meet these concerns.”

Wheeler acknowledged that “the vast majority of landlords provide their tenants with a decent home and good quality service” and that “few landlords evict good tenants without a sound reason”. 

The MP said that following the government’s decision to get scrap Section 21, the government will ensure the changes work for both tenants and good landlords.

David Smith, policy director for the RLA, commented: “The minister’s comments are welcome. As the RLA has long argued, landlords are left frustrated at almost every stage where they want to repossess property through the courts. This makes it harder to address the problem of bad tenants including those committing anti-social behaviour who cause misery for their neighbours.”

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London’s prime property hotspots revealed

May 14, 2019

Buy-to-let landlords looking to buy property in London are being urged to consider investing in what Black Brick describes as ‘two areas they may have overlooked in the past’. 

The buying agency has identified Bermondsey and Fitzrovia as London’s next prime property hotspots. 

On the southern side of the Thames, stretching east from London Bridge, Bermondsey was recently named London’s best place to live by the Sunday Times. While buyers can find loft apartments here for for seven-figure sums, it is also still possible to buy a one- or two-bed ex-local authority property for around £350,000. 

Tom Kain, buying consultant at Black Brick commented: “For investors looking at buying in London, but without the budget for super prime/prime areas, Bermondsey and the SE1 area in general presents an opportunity to buy into a very centrally located area with excellent transport links.” 

North of the river, Fitzrovia – bounded by Oxford Street to the south, Tottenham Court Road to the east, and Great Portland Street and Euston Road to the west and north – has been similarly overlooked, according to Black Brick.

Historically somewhat drab and dominated by office buildings and the estate of University College Hospital, it is undergoing a wave of development and modernisation that promises, if not outright transformation, certainly a significant polishing up.

The Crossrail redevelopment of Tottenham Court Road station is heralding a smartening up of the east end of Oxford Street and of unlovely Tottenham Court Road itself. And developers have been moving in to take advantage.

Managing Partner Camilla Dell said: “There are a raft of other smaller more boutique new build developments and re-developments of previously commercial buildings popping up in Fitzrovia, combined with significant investment into commercial buildings and infrastructure we predict the area should outperform other parts of central London over the next few years.”

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Sharp rise in safety issues identified by independent inventory clerks

May 14, 2019

Inventory reports are increasingly showing and reporting safety and compliance issues within tenanted properties, according to the Association of Independent Inventory Clerks (AIIC).

The organisation states that independent inventory clerks are affectively identifying and reporting on issues that could be criminal offences in tenanted properties in the UK.

The AIIC claims that the recent introduction and implementation of the Fitness for Human Habitation act has led to an increase in compliance and safety issues being picked up on by independent clerks affiliated with its regulatory body.

Danny Zane, founder of My Property Inventories and chair of the AIIC, said: “The level of mandatory checks has increased greatly over the last decade, from Gas Safety to smoke detectors being present in the right places and working on the move in date. For example, when a landlord instructs us to carry out the inventory check-in, they can gain solid proof that the detectors were present, power tested and working on the move in day.

“However, our clerks are finding properties that just do not tick all the required boxes when it comes to habitation and lawful responsibility. Thankfully landlords and agents are always very grateful that we are on site and able to note issues in order to get them resolved.”

He added: “independent property inventory reports are now about much more than the cosmetics of a property, our services are a vital part of the system that keeps tenants and landlords safe and well.”

 

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NLA’s new guide on the Tenant Fees Act can now be downloaded

May 14, 2019

The National Landlords Association (NLA) is trying to help buy-to-let investors prepare for the ban on tenant fees by introducing a new comprehensive guide that tenants can download.

The guide on the upcoming Tenant Fees Act, containing information that landlords need to know about the upcoming legislation, looks at some of the key changes.

The Tenant Fees Act 2019, which will come into play from 1 June 2019, applies to England only, although similar legislation is being introduced in Wales.

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

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

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

The only charges permitted will be for replacement of a lost key or security device, and a charge when rent payments are at least 14 days late.

Landlords will also still be able to claim for damages where there is a breach of the tenancy agreement.

There will be a 12-month transition period for existing tenancies, which means that any tenancies agreed before 1st June 2019 will not be subject to the new rules until 2020.

However, all new tenancies from 1st June 2019 will need to comply with the regulations. You must make sure that any tenancy agreements are up-to-date and reflect the provisions around fees. NLA members can always access the most recent version of our Assured Shorthold Tenancy agreement via NLA Forms.

For landlords who are found to be in breach of the fee ban, a fine of £5,000 will be issued for an initial breach of the ban. It will be a criminal offence if an individual has been fined or convicted of the same offence within the last 5 years.

Alternatively, financial penalties of up to £30,000 can be issued by local authorities instead of prosecution.

For further advice on how to prepare for the ban on fees click here to download the guide.

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Paragon introduces short-term funding for landlords

May 14, 2019

Paragon has expanded its product range with the introduction of short-term finance for landlords to fund property refurbishment.

The short-term finance products are designed to help landlords planning to purchase and improve property, as well as those looking to upgrade already-owned property to achieve a better yield.

The new range, which includes three different options to cover standard, light and heavy refurbishment projects, makes it suitable for landlords considering simple improvements, those undertaking refitting and modernisation work and those carrying out alterations that need planning permission, permitted development rights or building regulations.

The range also extends to projects involving a change of use for HMOs and multi-unit conversions.

All options offer loan amounts of up to £1m, with maximum loan to value (LTV) ratios ranging from 65% to 75% and terms from one month to 12 months depending on the option selected.

Loans are interest-only and come with a choice of either monthly payments or rolled up interest.

Landlords applying for standard and light finance with a maximum term of six months can also opt for a simultaneous short term finance and buy-to-let mortgage application on the same property.

John Heron, director of mortgages at Paragon, commented: “Short-term finance is an important part of the funding mix especially for professional landlords looking to grow or reconfigure their property portfolio.

“As landlord tax changes begin to bite, property refurbishments can offer an attractive route to boost capital value and improve yield.”

 

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Landlords who sold up last year made an average £80,000 profit

May 13, 2019

The average buy-to-let landlord made £80,000 profit upon selling their rental property in 2018, new figures show.

Landlords in London made the most, at an average of ££248,120, which is almost three times as much as those selling outside the capital.

In 2018, 85% of landlords sold their buy-to-let for more than they paid for it, with 15% making a loss, according to the research by Hamptons International, part of Countrywide, which analysed data covering England and Wales.

However, the research, which shows that the average landlord selling up had owned their property for 9.6 years on average, found that the profit made by landlords last year was on average down £3,660, or 4.4%, when compared with the £83,430 average gross gain landlords made in 2017.

London landlords selling up last year made £24,000 less than those who sold in the capital in 2017.

Average landlord gain (before tax)

 

 

According to figures published today, the average pre-tax profit earnt by a landlord who sold up fell in five out of 10 regions between 2018 and 2017 as house price growth slowed. 

Landlords who sold their buy-to-let in the North East made the smallest average gain of £11,810, £4,270 less than in 2017.

Meanwhile average gains increased between 2017 and 2018 in the South West (£3,460), East Midlands (£2,020), North West (£400), Yorkshire & the Humber (£4,490) and Wales (£5,340).

 Landlords selling up in London and the South East were most likely to sell their buy-to-let for more than they paid for it, with 96% of landlords making a profit in 2018.  Meanwhile, landlords selling up in the North East were least likely to make a gain, with 56% selling their buy-to-lets at a profit and therefore 44% making a loss.

There were four local authorities in England and Wales where landlords were more likely to sell their buy-to-let for less than they paid for it last year - South Tyneside (49%), Sunderland (48%), Darlington (45%) and Middlesbrough (43%).

With the highest house prices and strongest price growth over the last 10 years, the top 10 local authorities where landlords made the largest gains in 2018 were in London. 

Landlords selling in Kensington and Chelsea made the biggest pre-tax profit, averaging £1,072,880, having owned their property for 10.6 years.

South Bucks was the region outside of the capital with the highest average gain of £278,310.

Aneisha Beveridge, head of research at Hamptons International, said: “The average landlord who sold their buy-to-let last year did so for nearly £80,000 more than they paid for it.  Over the 9.6 years that the average landlord has owned their buy-to-let, house price growth has driven their gains, with prices having risen around 30% over the period.  But given lower expected future house price growth and tighter mortgage regulation, more investors are shifting their focus from capital gains to yields.”

Top 10 local authorities with highest average landlord seller gain (before tax)

Local Authority

Region

Average gain

£

% making a gain

Average ownership

KENSINGTON AND CHELSEA

London

£      1,072,880

91%

10.6

CITY OF WESTMINSTER

London

£         557,380

91%

11.1

CAMDEN

London

£         433,560

95%

9.3

HAMMERSMITH AND FULHAM

London

£         432,150

96%

10.1

RICHMOND UPON THAMES

London

£         325,100

96%

10.1

WANDSWORTH

London

£         317,820

96%

10.0

ISLINGTON

London

£         296,300

96%

9.3

HACKNEY

London

£         289,650

98%

8.9

HARINGEY

London

£         278,410

95%

9.3

SOUTH BUCKS

South East

£         278,310

98%

9.3

Source: Hamptons International

The data also reveals that rental growth rose to 2.1% in Great Britain, the highest rate since January 2018, as the cost of a new let increased to £972 pcm.

Rents rose in every region across Great Britain, led by gains in London which had the highest rental growth with average rents rising 3.9% year-on-year, followed by the South West (1.8%) and the Midlands (1.6%).

Beveridge added: “Rental growth accelerated to 2.1% in Great Britain last month, the highest level since January 2018.  This was driven by a 3.9% year-on-year increase in London rents.”

New lets (pcm)

 

Apr-19

Apr-18

YoY

Greater London

£      1,738

 £      1,672

3.9%

    Inner London

£      2,663

 £      2,596

2.6%

    Outer London

£      1,563

 £      1,497

4.4%

South East

£      1,039

 £      1,033

0.6%

South West

£         801

 £         786

1.8%

East

£         954

 £         946

0.9%

Midlands

£         682

 £         671

1.6%

North

£         628

 £         621

1.1%

Wales

£         660

 £         655

0.8%

Scotland

£         631

 £         628

0.3%

Great Britain

£         972

 £         952

2.1%

Source: Hamptons International

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Tenant Fees Act 2019: Guidance for landlords and agents

May 13, 2019

New guidance for landlords and letting agents has been released by the government.

The Tenant Fees Act 2019, which applies to England only, will come into play from 1 June 2019 and applies to fees paid in connection with a tenancy of housing.

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

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

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

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

Click to read: Tenant Fees Act 2019: Guidance for landlords and agents

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Rents rise in line with inflation

May 13, 2019

Rental price inflation has slowed down, with HomeLet's latest data revealing that the average monthly rent in the UK now stands at £936, which is up 2% on the corresponding period last year.

The data, based on new lets agreed by landlords and agents using the firm’s referencing service, shows that rents are rising in line with inflation, which currently stands at 1.9%.

When London is excluded, growth, in percentage terms, was actually a lower rate of 1.8% year-on-year, with the average rent in the UK, without the capital, now stood at £775 per calendar month (pcm).

Unsurprisingly, rents in London remain the most expensive in the UK, at an average of £1,617pcm, which is up 1.8% on last year.

The region with the largest year-on-year increase is the South East, showing a 3.2% rise between March 2018 and March this year.

Rents in April increased in 11 of the 12 regions monitored by HomeLet.

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Notable rise in the number of over 65s investing in buy-to-let

May 13, 2019

There has been an increase in the number of older people investing in the buy-to-let sector, fresh figures show.

Commercial Trust has seen borrowers aged between 65 and 75 increase their share of buy-to-let mortgage applications by 5.43% in 2018, owed in part to the fact that a number of mortgage lenders have recently increased their maximum age at the end of the mortgage term criteria from 75 to 85 years, while also pushing up their maximum mortgage term.

The data from Commercial Trust reveals a 4% increase in the proportion of buy-to-let purchases and remortgages from over 55s, who now account for 39% of all buy-to-let activity.

For purchase only applications, over 55s were responsible for almost a third - 29.7% - of all business in 2018, which is up 8% year-on-year.

Andrew Turner, chief executive at Commercial Trust, commented: “Our look at the age demographics for 2018 buy-to-let mortgage activity, suggests that increasing numbers of older people are recognising the potential of buy-to-let investments.

“Our data indicates that many people reaching retirement are choosing to invest in bricks and mortar and the rental market as a means to fund their retirement years.

“Investing in property has the potential to deliver attractive rental yields and achieve capital growth, despite industry changes. I fully expect that the returns fair better than many other forms of investment.”

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Platform reduces buy-to-let mortgage rates

May 13, 2019

Platform has cut selected buy-to-let rates by up to 0.1%, while also announcing plans to scrap from next week restrictions on landlords letting to tenants in receipt of housing benefit.

Two-year fixed rates offered by the intermediary mortgage brand of The Co-operative Bank now start from 1.79%, two-year tracker rates start at 1.74%, while three- and five-year rates are available from 2.09%.

All terms are available at up to 75% loan-to-value (LTV) with a range of fee paying or fee free options.

As far as the announced changes to remove restrictions on landlords letting to tenants in receipt of housing benefit is concerned, this will come into play from the start of next week.

Neil Wyatt, head of intermediary distribution at the Co-operative, commented: “We are making changes to the interest rates offered on our buy-to-let mortgages as we look to grow the share we have of this market. This comes at a time when we’re also completing the changes we announced from the start of April 2019 to no longer reference conditions that restrict landlords from letting to tenants in receipt of housing benefit.

“We’ve not considered the restrictive terms since the beginning of April 2019, but the final changes to remove this wording take place on 19 May 2019. We’re glad to have been able to remove this terminology from our lending processes and documents to the benefit or our landlords and prospective tenants.”

 

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Government allocates £200m to replace Grenfell-style cladding from high rises

May 10, 2019

The government has set up a £200m fund to replace unsafe Grenfell Tower-style cladding on around 170 private high-rise residential buildings across the UK.

The decision to make the funds available follows the tragic 2017 fire at the west London tower block that killed more than 70 people, with cladding cited as the main cause for the rapid spread of the blaze.

The money will be made available to building owners to remove aluminium composite material cladding.

This step has been taken after private building owners failed to take action and tried to offload costs onto leaseholders.

The Prime Minister, Theresa May, said: “It is of paramount importance that everybody is able to feel and be safe in their homes.

“That’s why we asked building owners in the private sector to take action and make sure appropriate safety measures were in place.

“And we’ve seen a number of private building owners doing the right thing and taking responsibility, but unfortunately too many are continuing to pass on the costs of removal and replacement to leaseholders.

“I can confirm we will now be fully funding the replacement of cladding on high-rise private residential buildings so residents can feel confident they are secure in their homes.”

The government has already fully funded this work in social housing developments. However, private developers and freeholders have been too slow to act and leaseholders have been threatened with significant, often unaffordable, costs resulting in delays.

The latest figures show that 166 private buildings are yet to start works on removing and replacing ACM cladding, compared to 23 in the social sector.

Building owners will have three months to access the new fund. 

Housing Secretary James Brokenshire commented: “Although temporary measures are in place to ensure people living in these buildings are safe, too many owners are treating this as a permanent fix. Others are trying to pass on the costs to residents by threatening them with bills running to thousands of pounds.

“While some building owners have been swift to act, and I thank them for doing the right thing, I am now calling time on the delay tactics of others. If these reckless building owners won’t act, the government will.”

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Shelter launches £600k fund to help vulnerable renters in Greater Manchester

May 10, 2019

Housing charity Shelter has launched a £600,000 fund in Greater Manchester today with a view to finding real-life solutions to the housing problems facing thousands of vulnerable private renters in the city.

Funded by the Nationwide Foundation and hosted by Shelter, the £1.2m Fair Housing Futures project seeks to address the challenges of accessing and living in Greater Manchester’s PRS that are faced by tenants with limited financial and social support.

The scheme is now calling for local organisations such as tenant’s groups, housing associations, and organisations covering planning, development and even health and well-being, to apply to have their ideas backed with cash from a £600,000 grant fund.

Shelter’s Roli Barker, project manager for Fair Housing Futures, said: “We know from our Shelter front-line services that the lack of social housing in Manchester is pushing more people into unstable private rentals.

“This funding from the Nationwide Foundation is an incredible opportunity for us as a city to help ourselves, to create a network of funded local projects that get right to the heart of the issues facing our vulnerable private renters. We want to leave a legacy of practical solutions, that make access to housing not only easier, but fairer.”

The project has already mapped out how sky-high rents and poor conditions across Greater Manchester leave many vulnerable renters struggling to survive in what Shelter describes as a broken private rented system.

Paul Dennett, Salford City Mayor and Greater Manchester’s lead for housing, homelessness and infrastructure, and who sits on the Fair Housing Futures board, commented: “With social and council housing becoming increasingly oversubscribed, more people are often being forced into the private rented sector.

“Whilst for most this is a good alternative, a small minority of unscrupulous landlords are exploiting vulnerable tenants and dragging down whole communities through mismanagement and negligence.

“In Greater Manchester we’re working to fix this, to ensure everyone has a decent, secure and safe home. Through our work on the private rented sector we’ll be supporting tenants, recognising good landlords and using all the powers and legislation at our disposal to make sure that unscrupulous landlords are forced out of our communities for good.

“Shelter’s Fair Housing Futures programme and grant funding will help us make sure the private rented sector in Greater Manchester works for all our communities and neighbourhoods – landlords and tenants together.”

Organisations applying for funding must either be based in Greater Manchester or have a partner applicant who is based in Greater Manchester.

Leigh Pearce, chief executive of the Nationwide Foundation, said: “The private rented sector has changed massively in recent years and needs to undergo significant redesign. It’s only right that we should make rented homes places where tenants are treated with respect and can truly feel happy and settled.

“This work will help tenants who are struggling with affordability and trapped in poor quality rented homes. The fund will test solutions to challenges faced by vulnerable, disadvantaged and low-income tenants in the private rented sector in Greater Manchester. Because the fund is not constrained by statutory obligations, it can be used creatively, and we look forward to seeing some innovative and smart ideas come through.

“We’ve chosen this mayoral authority to work in as we see enormous appetite for modernisation of housing policy and practice in Greater Manchester. However, the fears and struggles facing tenants in Greater Manchester are sadly not unique, and we hope that the successes here will eventually trail-blaze vital improvements to the private rented sector right across the UK.”

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Rogue landlord ordered to pay almost £25k for unlicensed HMO

May 10, 2019

An unscrupulous landlord has been told to pay close to £25,000 after being prosecuted for renting out rooms in an unlicensed House in Multiple Occupation (HMO), which was in breach of fire safety regulations.

Diana Thompson of Barn Way, Wembley, pretended that she was a lodger to her tenants who were renting rooms inside her property, which is also located in the north west London area.

The two-storey unlicensed detached property came to Brent Council Housing Enforcement officers’ attention following a tip-off from council tax officers that Thompson was trying to claim a single person's discount when in fact she was living in a home that she was renting out to seven other people.

When licensing enforcement officers raided the property in July last year, Thompson lied by saying that she was a relative of the landlordand that the first floor of the property was owned by another landlord.

But when enforcement officers discovered that Thompson was lying and that in actual fact she had failed to licence a HMO as well as failed to comply with fire safety regulations, they rook action against her.

Thompson was ordered to pay fines in total of £20,000 by Willesden Magistrates Court, which included £15,000 for failure to licence and £5,000 for failing to comply with fire safety regulations. She was also ordered to pay a further £4,678 in costs and a £170 victim surcharge.

Cllr Eleanor Southwood, cabinet member for Housing and Welfare Reform, commented: “Rogue landlords will not get away with pulling the wool over our eyes. If a landlord or agent is breaking the law, we'll find out and we'll hold them accountable.

“Our aim is to drive up housing standards by supporting good landlords and enabling vulnerable tenants to be aware of their rights as renters.”

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TML launches first expat buy-to-let product range

May 10, 2019

The Mortgage Lender (TML) has launched its first expat buy-to-let mortgage product range.

Available for both purchase and remortgage applications, initial rates start at 3.95% for a two-year fixed rate at 70% loan to value (LTV) and 4.35% for a five-year fixed rate at 70% LTV.

The expat buy-to-let products, available to the whole of the market, have a £150 application fee, a 2% completion fee and a maximum loan of £750,000.

To qualify applicants must be able to pay the mortgage from a UK bank account and have an agent or family in the UK who can oversee the property.

In addition, the products are only available to expats with a minimum salary of £40,000 for employed borrowers, or £60,000 for self-employed, and on a capital and interest, part or interest-only basis.

TML’s deputy chief executive, Peter Beaumont, commented: “There has been a 30% rise in the demand for expat BTL mortgages year-on-year, and our new range meets the increase in demand from expat landlords and gives BTL brokers more choice for their customers.”

 

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New book aims to help landlords thrive in buy-to-let sector

May 10, 2019

With more than 170 pieces of landlord legislation in place, property experts, Paul Shamplina and Kate Faulkner, have once again joined forces to co-write a new version of their book ‘The Landlord’s Friend’. 

The book aims to help both novice and seasoned landlords navigate their way through the ever-changing PRS, with an A-Z of legal advice and practical tips.

Shamplina, a landlord and eviction specialist, has been helping landlords for over 25 years and is the founder of Landlord Action.

Faulkner, who has written a number of property books for Which?, regularly advises property investors regarding key issues affecting investors.

With this book, Faulkner and Shamplina have pooled their extensive experience to help property investors successfully navigate the business of buy-to-let, from those just considering making an investment through to experienced landlords.

The book has 50 chapters divided into three sections:

+ Preparing for successful letting

+ Letting your property

+ Running your portfolio the right way

Shamplina commented: “It’s hard to believe that it was nearly five years ago that Kate and I first published ‘The Landlord’s Friend’, and today, landlords have never needed a friend more.

“The buy-to-let landscape has changed vastly during this time, particularly with the constant changes to tax and now Section 21, meaning small landlords are seriously having to think whether they want to stay in the sector.

“However, I think it’s important to remind people that demand is still extremely strong, with the PRS making up 21% of our total housing sector and predicted to rise to 24% by 2021. All of these people need somewhere to live, and the government is under pressure to support a more professional sector which provides a safe environment for tenants.

“There is still very much a place for landlords who take their legal and moral responsibilities seriously, so we want to help landlords stay profitable while ensuring they do it the right way.”

Kate Faulkner, managing director of Propertychecklists.co.uk, added: “Landlords are going through a tough time just now. Not only are they being hit by increased taxes, the changes in legislation to the Private Rented Sector are coming in thick and fast, with Local Authorities able to find landlords who make mistakes up to £30,000 for each breach.

“Meanwhile, tenants’ expectations of being delivered a beautiful home to live in rather than a temporary place to stay are increasing.

“The latest version of ‘The Landlord’s Friend’ helps to equip both new and existing landlords with the information they need to invest and run a buy to let property successfully.”

You can buy the 2019 edition of ‘The Landlord’s Friend’ by clicking here

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Landlord ordered to repay £52,000 within three months or face prison

May 9, 2019

A private landlord in Lincoln has been warned that he could be given a prison sentence of up to 15 months if he fails to repay £52,000 by August.

Leonardo Viscomi, of Malham Drive, Lincoln, continued to accept rent payments despite knowing that his property, which was being leased to people running European Foods Street, was being used to sell illegal alcohol and cigarettes.

The 61-year-old landlord confessed that he had known the property was being used for the illegal sale of alcohol and cigarettes, but insisted that he had no involvement in the running of the business and argued he had attempted to get the tenants to leave the property amicably.

He also claims the money, received over six years, was needed as he had bills to pay.

But his failure to evict those responsible meant criminal proceedings were taken against him and he was prosecuted.

In January, Viscomi pleaded guilty to knowing criminal activity was happening at his premises and was handed a suspended sentence as well as being given 150 hours unpaid work.

He has now been back in court and has been ordered to pay £52,755.57 within three months under the Proceeds of Crime Act.

Failure to repay the sum could see Viscomi, who also has a business in Retford, sent to prison for as much as 15 months. He must also pay full costs of £8,517, but this is payable within 12 months.

Andy Wright, Principal Trading Standards Officer at Lincolnshire County Council, said: “For six years, Mr Viscomi received rent payments which originated from the sale of illegal cigarettes, it is only right that he pays this back.

“Mr Viscomi has three months to find almost £53,000, or if not, will go to prison for 15 months.

“As I've said before, it was never our intention to prosecute Mr Viscomi. He is a man of previous good character, and so we tried really hard, over a number of years, to give him detailed advice and information about what was happening in his building and the likely consequences if he continued to take rent payments.

"We tried prosecuting the sellers of the goods, but these were quickly replaced with another willing party, so we’ve tried a different tactic – which seems to be making a real difference at removing illegal and counterfeit cigarettes from our streets.”

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Cost of buy-to-let mortgage rates set to rise, says Property Master

May 9, 2019

Fixed rate buy-to-let mortgage costs look set to rise in the near term, according to Property Master.

Property Master’s May 2019 Mortgage Tracker shows the cost of five-year fixed rate buy-to-let mortgage offers for 50% of the value of a property were unchanged between April and May of this year, while cost of a five-year fixed rate buy-to-let mortgage offers for 65% of the value of a property increased month-on-month by just £2 per month. 

The tracker also reveals that five-year fixed rates buy-to-let mortgage offers for 75% of the value of a property fell by £2 per month.  A similar picture emerged for two-year fixed rate buy-to-let mortgage offers with the cost remaining the same or going down by £1 or £2 per month.

But the online mortgage broker believes that recent stability could be about to change.

The company points to last week’s Bank of England Inflation Report which signalled interest rates would rise quicker than expected on the back of growth in wages, falling unemployment and stronger GDP.

Angus Stewart, Property Master’s chief executive, commented: “We have been tracking the cost of buy-to-let fixed rate mortgages for almost 18 months now so have a large database. There have only been two movements in base rate over that period the last one of which was in August 2018, so we have seen a lengthy period of stability. 

“But the Governor of the Bank of England signalled clearly last week that we should prepare for this stability to end much quicker than was expected on the back of positive news around wages, unemployment and stronger GDP.”

He added: “Stable base rates and increased competition in the lending market has helped to keep rates down in the buy-to-let market but last week’s news means it really is time for landlords to start re-thinking their finances.”

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New Oxford accreditation scheme is ‘unlawful’, says RLA

May 9, 2019

A new landlord accreditation scheme in Oxford has been deemed both discriminatory and unlawful by the Residential Landlords Association (RLA).

The association has written to Oxford Council to oppose the scheme on the grounds it includes conditions which breach European directives.

In Oxford, all landlords of houses of multiple occupation (HMO) are required to obtain a licence, in order to rent out their property lawfully. Around 20% of the city’s population live in an HMO.

Under the existing scheme, private landlords in Oxford accredited by the council are able to obtain a longer HMO licence, than those who are not, even if landlords are able to demonstrate expertise in alternative ways such as through training.

In a letter to the council, the RLA argues that this is an unfair and unlawful policy, because longer HMO licences offer a financial and practical benefit for landlords, yet only landlords who are members of the Council’s accreditation scheme can benefit from these longer licences at the moment.

The scheme also includes a condition demanding landlords attend training sessions to become accredited.  The RLA has warned that this discriminates against landlords who live outside of Oxford or the UK but rent property out in the city and breaches the EU Service Directive, which clearly states that accreditation and licensing ‘cannot be provided in a way which discriminates based on country of establishment’.

The RLA is now calling for the authority to review the plan as a matter of urgency.

David Smith, policy director for the RLA, which is threatened the council with judicial review, should Oxford City Council not take action, commented: “It is very concerning that there are so many apparent illegalities in Oxford City Council’s accreditation scheme.

“The RLA strongly urges the local authority to review the scheme and would welcome the chance to meet with council representatives to discuss our concerns further.”

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London’s super prime rental market sees demand surge

May 9, 2019

Activity in London’s the super prime rental market has hit a five-year high as more people opt to rent rather than buy property, amid political turmoil.

The number of tenancies agreed and volume of new prospective tenants registering in Q1 this year was the highest since 2014 in both prime central London and prime outer London, thanks in part to Brexit-related uncertainty that has boosted rental demand.

There were a total of 31 super-prime (£5,000-plus per week) tenancies agreed in London in the first three months of 2019, which is the highest figure on record for this period of the year.

Knight Frank reports that average rental values in prime central London increased by an average of 0.6% year-on-year and by 0.4% in prime outer London over the same period, in response to falling levels of supply, prompted by landlords seeking to sell their properties in response to recent tax reforms.

Both sales listings and lettings listings have seen large spikes over the last year. This volatility reflects how some landlords have attempted to sell in response to higher taxes but have returned to the lettings market after failing to achieve their asking price.

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Top tips for first-time landlords

May 9, 2019

We all know that investing in a buy-to-let (BTL) property is a huge responsibility, but for those of you who are relatively new landlords, ARLA Propertymark has compiled some top tips, which some experienced buy-to-let landlords may also find useful, to ensure that your legal obligations are understood and that you do not risk falling foul of ever-growing legislation.

Peter Savage, president, ARLA Propertymark, said: “Whether you’ve just bought your first BTL, or you own 50, you are governed by the same rules, and with more than 145 pieces of landlord legislation, it’s worth getting up to speed with the basics before marketing your property.

“Failure to do so can result in tens of thousands of pounds in fines and potential prison sentences, but by working with a professional ARLA Propertymark Protected agent, you can rest assured that you’re compliant.

“Letting your property is a big deal, and a big decision, both for you and the tenants that will be living there, so it’s really important you understand and appreciate what it entails before you start.”

Do you need a licence?

Depending on which local authority your property sits in, you may need to apply for a landlord licence before you can legally rent it out. This system is in place to ensure all properties are maintained to a high standard, and although it was introduced in 2006, it hasn’t been adopted by all local authorities, so it’s worth checking if you need one.

Preparing your property

Get to know the area your property is in. Is it in a student area, near commuter links or suitable for a family? If you’re near a university, you should probably furnish the property, whereas if you’re near commuter links, you’re more likely to have a young professional or a family who may own furniture already.

You should consider if the kitchen or bathroom need to be updated, whether the floor coverings or blinds or curtains need replacing, and if the overall décor needs an overhaul. Some improvements don’t have to cost the earth but will make the property more attractive to prospective tenants. Other small things you could consider include installing USB plug sockets throughout the house, replacing lamp shades and ensuring the doorbell works.

Finding suitable tenants 

As a landlord, you will need to reference new tenants to check they will be able to meet monthly rent payments. An ARLA Propertymark Protected agent will be able to help you with these checks, which include credit eligibility, affordability, employer checks and any references from previous landlords. You are also legally obliged to confirm prospective tenants have the right to lawfully live in the UK through Right to Rent checks under the Immigration Acts 2014 and 2016.

Putting a contract in place

It isn’t a legal obligation to have a tenancy agreement, but it is strongly advised and best practice. A contract protects you, your property and your tenants from anything which you may disagree on such as rent payments, the deposit, length of tenancy, who lives there, whether your tenants are allowed to keep pets and how the property and anything inside it should be treated. Your agent will help you produce a legally binding contract that all parties should sign before the keys are handed over.

Tenancy Deposit Protection (TDP)

If you’re taking a deposit from your tenants, it must be protected in one of the Government-authorised TDP schemes. There are three available – Deposit Protection Service (DPS), MyDeposits or the Tenancy Deposit Scheme (TDS). You will need to protect the deposit within 30 days of receiving it and provide your tenants with the Deposit Protection Certificate and completed Prescribed Information, and the Government’s How to Rent guide. If you don’t do this, you won’t be able to evict your tenant and you might be ordered to return the full deposit and be given a fine of up to three times the value of the deposit. In order to support any proposed deductions from the deposit at the end of the tenancy, it is best practice that an Inventory and Schedule of Condition are completed at the beginning and end of the tenancy for comparison. Taking photographs is a further safeguard.

Energy Performance Certificate (EPC)

Your property must be at least EPC band E before letting it out, and you have to serve your tenants with an EPC. If you arrange a tenancy without ensuring your property is up to these standards, you could be fined up to £4,000.

Safety checks

It’s your responsibility to ensure the property is safe for your tenants, and as a part of this, you are legally required to get all gas appliances checked by a Gas Safe registered engineer every year. You must then provide tenants with a Gas Safety Certificate within 28 days of the annual check taking place.

You also need to ensure there are working smoke alarms fitted on every storey of the property from the start of the agreement, and carbon monoxide detectors must be in any room where solid fuel is used – both alarms must be tested on the first day of the tenancy. Though not compulsory, it’s recommended to install carbon monoxide detectors where gas appliances are present.

Maintaining the property

You should open a line of communication for your tenants at the start of any agreement. If you have an agent managing the property on your behalf, ensure contact details have been exchanged and if you’re managing it yourself, be clear about the best way to reach you, and how long they can expect to wait for a response on both basic repairs and more urgent issues.

Inspections

Although it’s your property, it’s illegal and classed as trespassing if you enter the property without your tenants’ permission. Best practice is to give them 24- or 48-hours’ written notice, and this should be stipulated in the tenancy agreement. If you don’t receive a response, you shouldn’t enter the property.

Landlord insurance

You risk invalidating your buildings insurance if you don’t inform your insurer that you’re renting the property out. Most standard policies don’t provide the protection you require as a landlord, so it’s worth taking out specialist landlord insurance. A good policy will cover loss of rent, damage, legal expenses and liabilities.

 

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‘Assault’ on landlords ‘contradicts the basic principles of sound tax policy’

May 8, 2019

Buy-to-let landlords are being unfairly penalised for the housing crisis, according to a new report by the Institute of Economic Affairs (IEA).

In its latest publication, the think tank said the government’s recent tax changes for buy-to-let property owners defied “any basic economic analysis”.

The report, seen exclusively by Telegraph Money, has called for a major overhaul of the way properties, particularly homes in the PRS, are taxed, especially as it believes that landlords are being “discriminated against” compared with owner-occupiers.

The IEA pointed out that in some instances, landlords will face an effective tax rate of more than 100% after 2021, when tough new rules fully take effect.

The authors of the report, Rosalind Beck and Philip Booth, two academics specialising in the property market, warn that the changes are likely to result in higher rents for tenants and a fall in the supply of rental housing as landlords exit the sector altogether.

The report warns that decent landlords are likely to be replaced by less reputable investors as a result of the tax changes.

Booth commented: “Recent tax changes to private rented housing will raise rents and reduce the supply of houses for rent.

“The government, under policies set in train by Mr [George] Osborne, is subjecting private landlords to a sustained assault by increasing stamp duty and not allowing finance costs to be fully deducted for tax purposes.

“This policy contradicts the basic principles of sound tax policy and the Treasury’s justifications are disingenuous. The policy may create situations in which over 100% of a landlord’s profit is due in tax.”

The IEA report suggests that the government should reverse the changes to stamp duty and mortgage relief. Such changes have made the tax system “more complex and less economically coherent”, the authors warn.

The think tank said discrimination between types of property should end, this means that homes held in corporate vehicles should not be treated in a more beneficial way than those owned by an individual. Even if it were replaced by another form of property tax, stamp duty should be abolished altogether.

“The Government has changed the tax system in a way which leads to private landlords being taxed more harshly than other forms of business,” the report said.

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Airbnb is a good idea but landlords urged to approach with caution

May 8, 2019

A growing number of private landlords are turning to Airbnb and similar platforms, but Apropos by DJ Alexander Ltd, a property management firm, is warning landlords to tread carefully to ensure they are not jeopardising their legal interest in the property. 

Many landlords see Airbnb as a potentially attractive proposition compared to traditional buy-to-let (BTL), especially in light of government cuts to tax reliefs, which largely explains why Airbnb now claims to have 223,200 active listings in the UK generating £854m with average earnings for the owners of £3,100 per year.

David Alexander joint managing director of Apropos by DJ Alexander Ltd, commented: “The recent regulatory and financial changes in the BTL market have made it more difficult for landlords to earn a good yield which, coupled with increasingly complex regulatory challenges, is causing many to rethink their options. It is understandable, therefore, that many may see Airbnb as a viable alternative to long term letting.

“Interestingly, Airbnb, appear to be highlighting potentially substantial earnings for owners who join their site. Although their official data states that average earnings for Airbnb hosts are just £3,100 per year which is unlikely to attract many landlords, they also provide potential revenues specifically for different cities which are much more appealing. For example, they state that property owners in Edinburgh could earn £1,959 a month; in London £3,563, in Manchester £1,595 with differing figures across the UK. These numbers will appear very attractive to landlords who have falling rents in real terms, lower tax incentives, and increased management and maintenance costs.”

Alexander continued: “There are, of course, pluses in short term letting on Airbnb and other websites. The daily income is higher than long term letting; there are fewer legislative, financial and regulatory issues; and it can be less punitive, in some circumstances, for borrowing.”

“However, you must inform your lender if you are making this change; your insurers needs to be informed; there may be considerable dead periods when you aren’t earning; the maintenance costs will be higher as you have beds to change and properties to clean on a regular basis; and Airbnb, although in the ascendant at the moment, is coming under considerable pressure from numerous local and national governments in the UK and abroad. They have already been banned in some cities and had their activities restricted in various places around the world.”

He added: “With Airbnb you may find that you make more money for the peak five or six months of the year, but the winter is completely dead in which case your earnings may balance out. The problem is that there is more work involved in dealing with 50 guests a year than in two permanent clients staying for a year. It is a balance and will depend on your expectations, your current experience of where your property income is going, and your location.”

Although Airbnb listings are across the UK there are four key areas where the majority are located: London; Scotland; South-West; and South-East which collectively account for 73% (163,300) of all listings. Of greater interest is that these four areas account for 78% (£666m) of all income generated for hosts in the UK.

Alexander concluded: “These figures highlight the importance in short-term letting of having a rental property in the right area.

“The issue for any wavering landlord contemplating the move from long to short term letting is the level of return, the guarantee of occupancy, the limiting of regulatory and financial restrictions, and the impact on the long-term value of the property investment.

“These are a lot of factors to consider so I would urge landlords thinking of this step to think long and hard before making a leap into the unknown. It will work for some but could be a mistake for others. Equally many landlords could substantially improve their earnings by reviewing their portfolio, their finances, and their individual circumstances. There is still a very good return to be made from the PRS, but it requires a professional approach.”

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Prime London rents increase in Q1 2019 due to ‘lack of available stock’

May 8, 2019

Rents increased by 2.6% in prime London and prime central London during the first quarter of year compared to Q1 2018, while rents are up by an average of 2% in prime fringe areas of the capital, which includes postcodes such as SE1, SE11, SW4, SW5, SW6, SW11, W4, W6, W9, W10, fresh industry analysis shows.

Across the three LonRes prime areas, the average rental value over Q1 2019 stood at £44 sq ft, according to the latest LonRes Agent Survey.

However, the research found that many landlords were increasing rents on new lets, rather than renewals.

Some 69% of respondents to the LonRes Agent Survey said that landlords were not increasing rents on renewals.

Rises in achieved rents, together with falls in achieved sales prices meant that rental yields increased over Q1 2019.

Yields across the three LonRes areas averaged 3.7%, the highest since Q3 2013.

The increase in rents is owed in part to a widening supply-demand imbalance in the market, with new instructions falling by 5.7% on Q1 2018, partly because more buy-to-let landlords are selling up.  

Some 30% of respondents to the LonRes Agent Survey reported an increase in landlords selling investment properties.

However, prime central London did see an increase in supply, up 2.4%, although it is worth noting that this is the only area to see growth in listings.

Almost half - 46% - of respondents to the LonRes Agent Survey reported having less rental stock on the market compared to the same period last year. One in five - 20% - reported an increase.

Marcus Dixon, head of research at LonRes, said: “The wait and see approach was evident in the lettings market this quarter.

“Renewal rates increased again with tenants choosing to stay put instead of moving across to the sales market or renting elsewhere. This resulted in fewer new lets in Q1 2019. But lack of available stock meant rents rose again this quarter, recording their sixth consecutive annual increase.”

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BBC explores challenges and opportunities for renters in coastal areas

May 8, 2019

In an attempt to help crackdown on poor quality housing, BBC News is exploring the challenges and the opportunities for communities in Coastal Britain.

The report, part of a new series by video journalists, Patrick Clahane and Dawn Gerber, features a substandard property in Great Yarmouth, Norfolk, occupied by Sheila Warner, 71, who is struggling to live in the flat, which has no heating and a hole in the ceiling.

Warner, who has lived at the property for 16 years, says that she has been waiting years for her landlord to carry out the improvements on her home.

But the landlord claims that he only received a single complaint from Warner and was in the process of resolving it.

An oversupply of low-cost, substandard housing, are affecting some of the town’s poorest residents.

Great Yarmouth Borough Council has introduced a Selective Licensing Scheme to tackle unethical private rent landlords and those who have houses in multiple occupation (HMO).

Watch the clip by clicking here.

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Precise Mortgages makes slicing available across its entire buy-to-let range

May 8, 2019

Precise Mortgages has made its top slicing feature available across its entire buy-to-let range.

The lender now accepts top slicing on all eligible personal ownership, limited company, portfolio, HMO, and holiday and student let applications. But first-time buyers are excluded.

Borrowers are also now permitted to use surplus portfolio or earned income to demonstrate that they could meet any financial stresses on their new property application, rather than solely through the rental income of that property.

Precise has also streamlined the application process by reducing the number of questions brokers have to provide answers for and enhanced its online buy-to-let calculator.

Alan Cleary, managing director of Precise Mortgages, commented: “In a challenging market, we’re always thinking of new ways to help more customers get the buy-to-let mortgage they want and optimise their investment opportunity.

“By making our top slicing feature available across our entire buy-to-let range it creates greater access to our two-year fixed rate products, therefore opening up options to more customers, particularly those who might have been restricted by ICR requirements in the past.”

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Rents continue to increase across most of England and Wales

May 7, 2019

Rents increased across most parts of England and Wales between March and April, according to the latest Goodlord rental index.

Monthly rents increased from March April in six of the eight regions Goodlord monitors across England and Wales, with declines only in the North East and South West.

The figures from PropTech company reveal wide regional variations.

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

London - £1,652pcm

South East - £1,009pcm

South West - £867pcm

East Midlands - £832pcm

North West - £774pcm

Wales - £770pcm

West Midlands - £699pcm

North East - £618pcm

The data also shows that landlords in London had the shortest void periods, at an average of just 12 days - while the capital also had the longest fixed term tenancies, at 14 months; this was a full two months longer than in the South East, which was region with the second longest tenancies.

Void periods continue to be longest in the West Midlands, with an average of 31 days

The North West and Wales were the most affordable regions for renters in April. Affordability is defined as a tenant’s yearly income divided by their yearly rent share. London and the South of England are still the most unaffordable regions for renters

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Where are the best places to currently invest in the North West?

May 7, 2019

The North West has long since ceased to be an “inside tip” amongst forward-looking property investors. It’s now one of the most vibrant property markets in the UK.

In fact, even though there is plenty of evidence that “northern capital” of Manchester and “second city” of Birmingham still have plenty of room for growth (and returns), some investors are now looking to take advantage of their development by investing in smaller cities or even satellite towns, which are still largely overlooked and hence can be excellent grounds for adventurous bargain hunters. If this sounds like you, then here are (some of) the best places to invest in the North West.

Liverpool

You could think of Liverpool as the Battersea of the North West. When its heavy industry departed, its fortunes took a bad turn, although it still retained clear traces of its former glory. Now, however, it’s busily engaged in a successful process of regeneration and it’s not just thriving, it’s one of the coolest places around. While coolness itself may not seem like a good reason to invest in an area, there are exceptions to every rule and Liverpool is one of them.

The two main reasons for this are its university and its tourist sector, both of which benefit from Liverpool’s image as a centre of culture, especially when it comes to music. As every property investor knows, students and buy-to-let are a natural combination and Liverpool’s growing economy combined with its overall affordability and high quality of life make it an increasingly attractive destination for young-adult professionals, who are also natural renters.

Burnley

Search for Burnley on the internet and there’s a high chance you’ll see the football team listed before the city. This is a very unfair reflection on the metropolis, which has a strong local economy as well as providing a convenient base from which to commute to Manchester and Leeds (and several other places).

Astute property investors are eyeing Burnley as “the new Salford” as prices in the latter continue to rise apace, driven not only by its proximity to Manchester (which was once its main attraction) but also by the growth of its own local economy, of which the highlights are MediaCityUK and the University of Salford.

Although Burnley does not have a university of its own, Burnley College has a partnership arrangement with the University of Central Lancashire (known as UCLan Burnley) through which it offers degree courses.

Bolton

Even though Bolton shares a name with one of fiction’s most infamous villains, there is nothing villainous about the Bolton property market. It’s already a pretty decent one in which to invest thanks to its own university, a solid local economy and excellent commuter links.

The reason why Bolton is gaining a new level of attention from investors familiar with the North West is because the Manchester–Preston line is now operational, thus making it even easier to commute from Bolton to Manchester (and Salford). While major rail initiatives such as HS2 and Crossrail have been making national news, the Manchester-Preston line has been largely ignored by the mainstream media with the result that investors unfamiliar with the area may not even know it exists, let alone appreciate its significance.

Mark Burns is the managing director of Manchester-based estate agents, Indlu.

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A third of renters in Scotland have no plans to ever own their own property

May 7, 2019

Almost one in three renters have no intention of ever acquiring their own property, mainly because they are happy living in the private rented sector, new research shows.

A survey of people who rent privately has found that almost 30% of tenants in Scotland do not plan to ever own a property.

The Tenant Research Survey, conducted by SafeDeposits Scotland, asked tenants about their experiences in the private rented sector and their expectations for the future.

Responses showed that as well as many not aiming to own property, 71% said they can see themselves renting for the foreseeable future.

Victoria Smith, Chief Operating Officer of SafeDeposits Scotland, said “What this survey makes clear is that tenants cannot be characterised as a single group of people of a certain age, background or other profile.

“People of all ages and from all walks of life rent for a number of reasons. The responses the survey received revealed that some tenants rent because it works for their educational and professional needs and is flexible – not just because they can’t afford to buy as is a common generalisation.

“Of course, for some people, that is the case, but by no means for all.

“Whether tenancy is an active choice, a long-term or short-term necessity on the way to owning a property, it’s important that tenants understand their rights and responsibilities.  The private rented sector in Scotland is diverse and growing. We want to help all parties in the sector to raise standards and ensure that it works for everyone.

“These survey responses and the interest shown in our Tenant Conference indicate that tenants are becoming increasingly engaged in the private rented sector.”

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Top DIY tips and tricks to improve your property

May 7, 2019

Property investors often debate on how best to improve their properties. Whether that is undergoing big property renovations or improving their green credentials, there are plenty of options on the table.

The team at home services company, Hometree, has put their heads together and come up with a list of helpful DIY tips and tricks to help increase your property’s value.

Boost kerb appeal

The outside of your property will give the all-important first impression to people and potential buyers. So, doing anything from replacing the front door to cleaning the windows and gutters or keeping the garden tidy can make a huge difference to the way people view your property.

Paint and decorate

Giving your walls a fresh lick of paint can go a long way. Neutral colours will make a room seem bigger and lighter, plus it allows potential buyers to visualise how they would adapt the space to their liking when they move in.

Update your central heating

A modern and energy efficient system is important. Upgrading a boiler that is older than 10 years can be a profitable investment as it will improve the property’s energy rating in the long run, whilst also lowering energy bills and your carbon footprint significantly.

Declutter, declutter, declutter

Set aside some time to go through each room and think about what you really need or how you can make the space tidier. Getting rid of excess furniture, clearing paperwork and tidying items hidden away from under your bed will help make a good impression to potential buyers and renters.

Tart up the kitchen

While an entirely new kitchen can cost thousands of pound, replacing even the smaller items can help make the space look more contemporary. Updating fixtures and fittings or a new work surface can make the area more appealing. And remember to keep it clean too to boost appeal!

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Sainsbury’s Bank cuts rates on BTL products

May 7, 2019

Sainsbury's Bank has cut rates across its buy-to-let products, amid strong competition among mortgage providers.

New buy-to-let rate deals include a five-year fixed mortgage product at 60% loan-to-value (LTV) which has been reduced from 2.16% to 1.99%, while the 75% LTV five-year fix BTL offer has been cut from 2.71% to 2.47%.

Sainsbury’s Bank entered the buy-to-let sector in May last year when it extended its mortgage range with the launch of two-year and five-year buy-to-let products for landlords with a portfolio of up to three properties.

The purchase and remortgage products, available only through the bank’s network of brokers, provide loans up to £1m at 60% LTV and £500,000 up to 75% LTV.

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Government urged to ‘stimulate’ rental home supply with ‘pro-growth taxation’

May 3, 2019

The UK is facing a private rented housing crisis unless the government takes rapid action to stop landlords selling up, according to the Residential Landlords Association (RLA).

A quarter of private landlords are looking to sell at least one property over the next 12 months, according to fresh research published yesterday.

Of almost 2,500 landlords who responded to a survey by the RLA, just over 25% said that they were planning to sell at least one property over the next year, the highest proportion since the RLA started asking this question regularly in 2016.

The survey also reveals that 23% of landlords report an increase in the demand for rental property over the previous three months, with 57% reporting it to be stable.

More than a third of landlords reported low levels of confidence in the PRS over the next 12 months.

The fact that so many private landlords are thinking about decreasing the number of properties they rent out is a major concern, given the existing supply-demand imbalance in the market, which will inevitably lead to rents increasing in the near term.

The Royal Institution of Chartered Surveyors has warned that the imbalance between supply and demand in the rental market is expected to see rents increase by an average of 15% over the next five years.

The RLA is now urging the government to address the growing crisis by ensuring that new regulations governing how landlords can regain possession of their properties in legitimate circumstances are fair and effective both for landlords and the tenants.

David Smith, policy director for the RLA, said: “All the talk of longer tenancies will mean nothing if the homes to rent on not there in the first place.

“The government's tax increases on the sector are already making it difficult for tenants to find a place to live, with many landlords not renewing tenancies. If rushed and not thought through, planned changes to the way landlords can repossess properties risk making the situation even worse.

“Action is needed to stimulate supply with pro-growth taxation and a process for repossessing homes that is fair to all.”

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New technology aims to provide greater gas safety accountability in the PRS

May 3, 2019

New technology has been launched in an attempt to improve gas safety accountability in the private rental sector.

The existing system makes it difficult for landlords and letting agents to know if the correct gas safety compliance measures are being followed and this could be putting tenants’ safety at risk.

It is a legal requirement for landlords - or agents acting on their behalf - to ensure gas appliances in rental properties are checked annually by a Gas Safe registered engineer. They must also provide renters with a gas safety certificate within 28 days of the annual check taking place.

But Gas Tag, a leading gas safety compliance tool, argues that a lack of transparency and technology is limiting the effectiveness of mandatory gas safety checks, all the while increased rental sector regulations are putting more pressure on the time agents and landlords can dedicate to compliance.

Paul Durose, founder and CEO of Gas Tag, says a lack of accountability for gas engineers is a significant issue in the private rental sector (PRS).

He commented: “There’s currently no real recourse when a poor job is carried out because of the lack of technology in the system.

“Currently, if agents and landlords want to categorically make sure engineers are doing a good job, there's not much else they can do other than physically checking themselves. It's finding a solution to this problem which inspired Gas Tag.”

Gas Tag provides a market solution which links directly to the Gas Safe Register, ensuring that the correct work has been carried out at the right time, by the right engineer.

It has three main components – the ‘Gas Tag’, a small tag scanned by engineers to show evidence that work has taken place at a property, an app used by engineers to log their work, and a portal, which provides proof of compliance and an overview of all gas works completed.

The Gas Tag portal gives landlords and letting agents a real-time view of all activity being carried out, with information available on completed works, properties at risk, maintenance due dates and a variety of other important events.

Durose added: “Our system offers unique transparency, demonstrating how compliance obligations are being met.

“Letting agents can easily showcase to clients that works at their properties have been completed by a Gas Safe engineer to a high-quality standard.

“We’re aiming to remove the worry of managing a paper-based system. Electronically-stored gas safety records are generated inside the portal as the work is completed, providing an audit trail for all parties.”

Durose says that there are a range of other benefits for landlords and letting agents.

He continued: “Our system allows agents to keep on top of their workload. You can stop spending your valuable time making calls to get updates from contractors,” he says.

“We want to help improve efficiency and solve issues with a paper-based system of maintaining compliance records.

“We are working with the government and insurance companies to ensure there is a Gas Tag in every household in the UK,” Durose concludes.

“Introducing technology into the system will have a transformative effect on gas safety in the UK and we are committed to ensuring that the PRS will be amongst the first to realise those benefits.”

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Where in the UK has seen the largest increase in room costs over the past year?

May 3, 2019

London unsurprisingly remains the most unaffordable city to rent a room in the UK with the average cost in the capital increasing to £745 per month, but where has seen the biggest increase in the cost of renting a room?

According to the ideal flatmate’s latest Room Rental Index, which looks at the cost of renting a room across the UK’s major cities, Leeds has seen the largest increase in average room rental costs year-on-year and over the first quarter.

ideal flatmate analysed the cost of thousands of spare rooms listed on its platform looking at the differing cost of renting across each major UK city, each borough of the capital, and how this has changed.

The Room Rental Index for Q1 shows that the average UK room rental cost is currently £535 per month, up 11% since Q1 of last year. 

Following London, Glasgow ranked as the second most expensive location, with the average room in the city costing £588 a month, followed by Bournemouth (£575), Cambridge (£562) and Leeds (£548).

While only ranking as the fifth most expensive, Leeds tops the table for both quarterly and yearly growth, with room rental costs up 32% and 50% respectively. 

Tom Gatzen, co-founder of ideal flatmate, said: “A new year but a similar story where the UK rental market is concerned with the cost of renting continuing to climb as a result of the imbalance between high demand and insufficient stock levels.

“This trend is almost certain to persist over the coming year and the impending tenant fee ban could see this growth spike further as rental cost are used to recoup lost revenue.”

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Accord sees market share grow but it remains a ‘testing market for landlords’

May 3, 2019

There is no two ways about it, the buy-to-let market has become much more challenging for property investors of late for a broad variety of reasons, but that has not stopped Accord Buy To Let increasing its market share.

The intermediary only lender has announced its best results to date, despite a further driop in buy-to-let property purchases.

The recently released February mortgage figures from UK Finance revealed the buy-to-let house purchase market was almost 8% down year-on-year, whilst the number of buy-to-let remortgages was up more than 2%.

UK Finance suggested the buy-to-let property purchase market had continued to contract due to tax and regulatory changes, while buy-to-let remortgaging increased as borrowers moved from fixed rate mortgages and locked into attractive new rates.

But based on the latest market data for completions, Accord has seen its intermediary market share for February increase, bucking the trend against a market which fell from £3.3bn in January to £3bn in February.

Chris Maggs, senior commercial manager at Accord Buy To Let, commented: “There’s no denying the market has experienced a hit since the Government increased regulation in 2016, but as with most changes, following a brief period of adjustment things start to stabilise and that’s definitely visible from our figures.

“Our focus for the past 18 months has been purely on supporting brokers and landlords. By responding to feedback we’ve made some significant service improvements such as updating our rental calculator, streamlining the online broker journey and being more flexible with our criteria to ensure we can lend to as many landlords as possible.

“We’ve also developed our product offering, ensuring we offer a competitive range of products at all LTV band. There are additional developments on the horizon which will further enhance the experience for both brokers and landlords.”

David Hollingworth, associate director communications at L&C Mortgages, added: “In a testing market for landlords, it’s crucial to have a broad range of products to meet a diverse set of investor requirements and demands.

“Accord recognises the need for an expansive product range to ensure it has something on offer to suit everyone, whether they are looking for a low fee remortgage product or adding to a growing portfolio.”

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TMW launches new large portfolio BTL products and cuts existing rates

May 3, 2019

The Mortgage Works (TMW) has launched a new portfolio range while also reducing a number of five-year fixed rate products by up to 35bps.

The buy-to-let arm of Nationwide Building Society has cut a number of five-year fixed rates, which now start from 2.39% at 65% loan-to-value (LTV) and 2.34% up to 75% LTV with a £1,995 fee.

TMW has also reduced rates on its existing large portfolio buy-to-let products.

The latest range of fee-free rates at 75% LTV include a two-year fixed rate which has been reduced from 3.49% to 3.29% and a five-year fixed rate down from 3.99% to 3.74%.

New large portfolio buy-to-let rates include a two-year fixed rate at 2.84% and a five-year fix at 3.39%. Both deals are available up to 75% LTV with a £1,995 fee.

Last month, TMW reduced rates on selected two-year fixed and tracker mortgages by up to 0.25%.

The lender also cut rates on some limited company mortgage deals, available on purchase or remortgage basis, by up to 0.35%.

Rates on a two-year fix now start at 2.99% at up to 75% loan to value (LTV) with a £1,995 fee, and 3.49% for a five-year fix at up to 75%, also with a £1,995 fee.

In addition to the rate cuts, TMW announced the introduction of a new fee-free range of fixed and tracker deals at up 65% and 75% LTV.

Rates for the new two-year product start at 2.44%, while the five-year deal starts at 3.09%. For tracker deals, rates start at 2.29%.

Paul Wootton, managing director of TMW, said: “These changes are designed to support a wide range of landlords, with rate reductions and a range of zero fee options, to help them access a wider choice of products to manage their cashflow. This illustrates TMW’s continued commitment to supporting intermediaries and landlords.”

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Many BTL landlords ‘are now looking towards Scotland to maximise returns’

May 2, 2019

The average rental yield returned to investors with property in Scotland has increased for the first time since March 2017, Your Move Scotland has found.

Fresh data from the letting agency reveals that the average rental property north of the border generated a return of 4.7% for its owners in March, higher than the 4.6% recorded a month earlier.

Consequently, landlord returns in Scotland are now at a six-month high.  This is in contrast to England and Wales, where yields have held steady at an average of 4.3%.

The only two regions in England and Wales to offer returns higher than the Scottish average during March were the North East and the North West, at 5% and 4.8% respectfully.

Brian Moran, lettings director at Your Move Scotland, commented: “Investors in Scotland have seen stronger returns this month than in February.”

 “This is the first rise in monthly yields since March 2017 and demonstrates why many investors from elsewhere are now looking towards Scotland to maximise returns.”

According to Your Move, across Scotland the average rent has increased 1.8% in the past 12 months to reach an average of £580 per calendar month (pcm). 

The Highlands and Islands region posted the biggest increase, with a typical property now being let for £688pcm. This is 4.9% higher than a year ago, but lower than the double-digit increases seen last year.

The only area to have higher rents was the Edinburgh and Lothians region, where the typical tenant pays £699pcm. This follows a 4.6% year-on-year rise.

Elsewhere, there were also rises of 1.4% in the East of Scotland and of 0.9% in the Glasgow and Clyde region. The average rent in the East is now £541pcm while in Glasgow and the surrounding areas it is £589pcm.

The South of Scotland was the only region to see prices fall on an annual basis, dropping 1.9% to £537pcm.

On a national basis, the average Scottish rent increased by 1.8% in the year to March to hit £580pcm, which is 0.2% higher than in February.

The data from Your Move Scotland also shows that the proportion of households in arrears rose modestly in March.

Some 10.7% of all tenancies were behind with their payments this month, higher than the 10.5% recorded in February. Despite the rise, the level of arrears is still below the 11.2% found in December 2018.

On an absolute basis, the number of households in serious arrears - defined as two months or more - was 8,283 this month.

Moran added: “With more tenants now renting for longer thanks to the introduction of the PRT, landlords are benefitting from the increased security and stability provided by these tenancies.”

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Brexit and the Right to Rent for EU nationals

May 2, 2019

Few people familiar with the UK property market would dispute the fact that the Right to Rent scheme has been deeply controversial and highly unpopular from its very inception. It was implemented in England in the face of harsh criticism from both landlords and housing charities, who both pointed out a fact which seemed to be obvious to everyone except the government, namely that private landlords had neither the expertise nor the resources to undertake the Home Office’s work for it. Now a combination of Brexit and the High Court may be about to make life even more difficult for landlords.

The Right to Rent, the story so far

The Right to Rent came into force in England on 1st February 2016. In principle, the act of Parliament under which it was introduced (the Immigration Act 2014) allows for the checks to be introduced in the other parts of the UK, however, pushback from the local governments has stopped it from being introduced outside of England.

Although the government promised that there would be support for landlords conducting residency checks and that draconian penalties which were permitted under the scheme (including prison sentences) would only be used in the most severe of cases, as predicted by numerous housing charities and other relevant bodies, landlords decided that they would rather err on the side of caution and only accept tenants who could show a “mainstream” form of identification such as a passport or UK driving licence. This had the effect of discriminating against people who were unable to provide such identification (even though they were legally entitled to be in the UK) and prompted a legal challenge.

The High Court challenge and what it means

In March, the High Court ruled that the Right to Rent Scheme is leading to discrimination, is incompatible with the European Convention on Human Rights and that the pilot the Government ran to evaluate the Scheme was insufficient. The government, however, has been granted leave to appeal this decision and has made it clear that it intends to do so and that while it does, the scheme remains in force as is.

In fact, the only immediate impact of the ruling is that it puts up another block to implementing the scheme in Wales, Scotland and NI, but given the political climate, this is arguably something of a moot point. Landlords in England still have to abide by the scheme and since the wheels of justice are notorious for rolling slowly it is highly likely that it will still be in force when Brexit happens (assuming that it happens to its delayed schedule of 31st October 2019).

The Brexit situation

At this point in time, it is very difficult to give guidance on what landlords should do in this situation because in one sense nothing changes (landlords must continue to undertake the Right to Rent checks in a non-discriminatory manner), in another sense, everything may change, in that EU citizens may switch, literally, overnight from having the right to rent to not having the right to rent, but then again they may not, since those who have lived in the UK for at least 5 years should have the right to legal UK residency regardless of what form Brexit ultimately takes.

At this point in time, therefore, the best advice which can be given is for landlords to be aware of the situation and to stay alert to the government guidance which will hopefully be given nearer the time.

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

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Rogue landlord ordered to pay £1.1m after converting flats into ‘cramped bedsits’

May 2, 2019

A buy-to-let landlord who converted a flat in London Bridge into ‘cramped bedsits’ without planning consent has been ordered to pay more than £1.1m.

Landlord Andre Charles Trepel is said to have made £1.2m in gross profit after dividing three flats into around 20 cramped bedsits and studios.

The council was successful in its £1.1m proceeds of crime order against the rogue landlord following a major clampdown.

Trepel was fined £10,000 and ordered to pay £35,000 costs at Inner London Crown Court  for breaching a planning enforcement notice, while his company No1 (London) Ltd was fined £1,000.

Trepel and his company have also been ordered to pay back £1,118,601 of his profits within three months, or face a seven-year prison sentence.

Under Proceeds of Crime Act rules, most of the money will go to the government.

But the council will get around £445,000 of the criminal benefit to re-invest in enforcement and crime reduction initiatives.

The council originally won a planning prosecution against Trepel, of Trinec in the Czech Republic, for his illegal conversion of the flats at 4-6 London Bridge Street in 2010.

The 74-year-old was fined and ordered to return the flats to their original condition.

Despite that, visits from council inspectors in 2015 and 2016 revealed little had been done to comply with the order – and further charges were brought in 2017.

The landlord was once again found guilty, but sentencing was deferred until an investigation could reveal how much profit he had made from renting out the illegally converted flats.

Cllr Victoria Mills, cabinet member for finance, performance and Brexit, said: “This council will not stand by and let our residents live in cramped properties that are harmful to their health and happiness, and we will use every legal measure at our disposal to ensure homes are of a decent standard and landlords do not profit from the misery of their tenants.”

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Rental prices rise 1.7% in Scotland

May 2, 2019

Scottish rents continued to edge up in the first quarter of the year, the latest figures show.

The Scottish national average increased to £793 per calendar month, up 1.7% year-on-year, with the average property taking 37 days to let, according to the latest Citylets Report for Q1 2019.

Gillian Semmler, communications manager at Citylets said: “Scotland’s private rented sector operated broadly to expectation against the underlying political chaos defining the Q1 period.

“There have been indications of a slower moving market, especially in Edinburgh, but certainly not as marked as in other property or indeed business sectors.

“More choice for tenants in the capital sees more tenants taking time to view multiple properties before committing. As a result, average time to let has increased by three days.”

Edinburgh

Property to rent in Edinburgh rose to a new record high of £1,115 per month against a backdrop of lengthening Time to Lets (TTLs), consistent with anecdotal evidence from local agents of tenants shopping around and taking advantage of the increased choice in the market.

Q1 2019 saw properties take 30 days to rent on average, three days longer than the previous year.

The rate of growth at 5% will once again cheer landlords and concern tenants however this is a lower rate of growth than previous quarters with longer TTLs hinting at a possibly softening market after more than 9 years of annual growth each quarter.

Glasgow

Tenants in Glasgow have also been reportedly shopping around before committing to a rental property.

Nonetheless, the figures for Scotland’s largest city remain stable with rents up a modest 2.9% to average £771 per month and TTL unchanged on last year at 31 days.

Three-bedroom properties rose a significant 8.6% on last year whereas four-bedroom properties fell, down 7.1%.

Volatility in the data for larger properties however is not uncommon given the lower volumes reported each quarter.

Glasgow’s main one- and two-bedroom property markets continued to post strong growth at 5.3% and 3% Y-o-Y.

Some 58% of all Glasgow properties are currently let within one month.

Aberdeen

Falls in rent were reported for all property types in Aberdeen in Q1 2019 however at minus 3.5% growth Y-O-Y, the rate of decline continues to ease. With re-let times continuing to reduce it is fair to view the figures for Q1 2019 as positive overall for landlords in the granite city.

One-bedroom properties fared best across key metrics of growth (minus 2.5%), TTL (49 days) and 41% let within one month.

The average property to lease in Aberdeen now costs £710 per month and takes 54 days to let, four days faster than last year.

Dundee

Dundee starts 2019 where it left off as rents continue to move upwards, albeit at a modest 1% YOY as at Q1 2019. The average property to rent stands at £620 per month and takes around a month and a half to let at 43 days.

As with other cities, the market data for Dundee was conflicting in part recording decreased rents for mainstream one- and two-bedroom markets but improved re-let periods. Rents for three- and four-bedroom properties continued to climb Y-O-Y.

West Lothian

Property to rent in West Lothian continues to enjoy good demand seeing averages rise once again, up 3.5% to £710 per month – same as the current average for Aberdeen.

The signs for this popular commuter belt region look positive for landlords with the time to secure tenants also notably falling to just over one month at 34 days.

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PropTech startup launches new house hunting app for students

May 2, 2019

Polygon has launched a new mobile app designed to make it easier for students to house hunt.

To help ensure that housemates are compatible, the PropTech startup has developed a housemate matching algorithm; an attractive proposition for some landlords looking to reduce void periods.

With Polygon, students can swipe left on homes they do not like and if they swipe right, they can leave their availability with the homeowner for a viewing or instant reservation.

Polygon’s housemate-finder algorithm pairs students based on their domestic habits and personalities to prevent this from happening, turning housemates into lifelong friends. This information is also available to the landlord to assist them in their due-diligence process.

The app offers free listings to landlords, letting agents and purpose-built student accommodation (PBSA). They only pay when the student signs their tenancy agreement.

Polygon only lets regulated landlords and letting agents list their properties on their platform.

Polygon’s CEO TK Gondo said: “The idea for Polygon came from a bad experience I had in my second year of university. My housemates and I were completely incompatible which lead to many arguments, petty disputes and me eventually leaving the house and ultimately dropping out of university.

“The fallout was stressful and expensive for me, my housemates and the landlord who’s revenue was at risk while the situation was resolved.

“I became obsessed with finding a solution to fix the problem and technology was the answer. As the concept for Polygon started to take shape our team uncovered that no one has genuinely taken the time to make a mobile-first accommodation platform for students. 

“After being accepted into the Google cloud for startups programme we have the business and technical support to keep improving and making our students happy.

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Brexit has helped create ‘a buyers’ market for buy-to-let’ in London

May 1, 2019

The buy-to-let market is starting to show some positive signs, especially in London where activity is picking up again, new figures show.

The ongoing political uncertainty is clearly causing some buyers and sellers to take a wait-and-see approach when it comes to the housing market, but with Brexit uncertainty continuing to hit house prices a growing number of buy-to-let landlords are starting to see it as a good time to buy property.

New data from specialist buy-to-let broker Commercial Trust Limited shows that London regained its position as the leading region for buy-to-let business applications during the first quarter of the year.

The number of submitted purchase mortgage applications for the capital in the 12 months to April rose by 4% on the previous quarter to hit 15.8% of overall business, closely followed by the South East on 14.5%.

In Q4 of 2018, the South East had overtaken London for the first time.

Commercial Trust’s data ties-in with a recent report from London estate agent Chesterton’s, who recently reported that London is starting to offer ‘improved yields’ as the market shows signs of bottoming out.

The East of England and the North West also enjoyed an increase in the proportion of buy-to-let applications submitted during Q1, with both accounting for 12.5% of this type of business.

The same two regions shared top billing for buy-to-let completions over the quarter, with each contributing 13% of overall completions.

Overall, remortgage buy-to-let applications continued to dominate in Q1, with 60% of business coming from landlords looking to refinance their mortgages.

Andrew Turner, chief executive at Commercial Trust, said: “The effects of Brexit have been keenly felt in London and perhaps the stalling of house price growth has to some extent created a buyers’ market for buy-to-let.”

Commercial Trust’s latest figures underline the importance of London and the South East within the buy-to-let market, according to Turner.

He continued: “For the first quarter of 2019, these two regions contributed over 30% of our buy to let purchase applications, an increase from the 26% recorded in Q4 of 2018.

“Whilst it is good news to see increased activity in London, movement is not restricted to that area and both the North West and East Anglia have also increased their proportion of overall purchase business during the quarter.

“With Brexit now pushed back to later in the year, the combination of low interest rates, a wide variety of mortgage product choice, stalling house prices and soaring tenant demand, many investors are of a mind to invest in the private rental sector.”

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Parents of students warned not to take the decision to become a landlord lightly

May 1, 2019

Parents with children at university may be considering whether it is worth buying them a property while they continue their education, but is the idea of becoming a so-called ‘parent landlord’ who is willing to take on their children as tenants really such as a good idea?

In a new report commissioned by the TDS Charitable Foundation, property expert Kate Faulkner warns parents not to take the decision to become a landlord lightly, highlighting the financial implications and more than 400 rules and regulations they could be subject to.

Faulkner, who runs Propertychecklists.com and consultancy Designs on Property, has analysed the costs and benefits of a range of accommodation options available to parents of students, as part of this new report, which provides advice for parents of students weighing up their accommodation options.

The report, part of a 12-part series commissioned by the TDS Charitable Foundation, is designed to educate and raise standards within the private rented sector.

Faulkner said: “With tuition fees for some universities topping £9,000 per year before living costs, higher education can leave graduates with average debts of £49,800, according to the Institute for Fiscal Studies.

“Parents naturally want the best for their children, and often try to support them by minimising the burden of accommodation costs, but the options available to do so can be unclear. The cost of specialist student accommodation has rocketed in recent years, but the price rises do not necessarily reflect an improvement in living conditions.

“Parents who have the financial means may consider purchasing a property for at least the duration of their child’s undergraduate studies, renting out any spare bedrooms to fund the mortgage. Those who do take this option, however, need to be aware of the responsibility they are taking on.

“Not only in terms of financial and tax considerations, but would-be landlords need to understand the complex legal framework in which they are operating, if they are to rent out spare rooms legally.

“Even for those with the financial ability to purchase a property for their child to use while studying, it isn’t always the right choice. This guide aims to help equip parents with the tools to make the right decision for them and their child.”

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The cheapest and most expensive areas to rent a room revealed

May 1, 2019

The average cost of renting a room in the UK has increased by £15 per calendar month (pcm) over the past year, from £567 in 2018 to £582 in 2019, new figures show.

The data from SpareRoom reveals that London, Northern Ireland and West Midlands have seen the largest jump, with rents up 4% year-on-year.

A closer look at the UK’s 50 largest towns and cities reveals that the highest surge in rental costs are in the north of England, with Lancashire’s Preston securing top spot.

Rents in Preston have increased by 8%, or £30 a month, since last year, bringing the average rent to £378pcm. York and Stockport follow with increases of 7% each.

At the other end of the scale, Southend-On-Sea, Aberdeen, and West Bromwich sit at the bottom of the table with decreases of -5%, -3%, and -3%, respectively.

Oxford follows London as the UK’s second most expensive city, with average monthly rents of £572 – a modest 1% rise since last year.

The university towns of Reading and Edinburgh place third and fourth, with average rents of £530pcm and £519pcm each. Conversely, the cheapest rents can be found in Belfast (£312pcm), Sunderland (£319pcm) and Middlesbrough (£327pcm).

In London, contrast to the traditional north-south divide, an east-west divide is now visible with many of capital’s cheapest rents located east and south-east, whilst the more expensive ones are found in the west and south-west.

Unsurprisingly, central St Pauls (EC4) is the most expensive location to rent in (£1,336), despite costs decreasing by -7% over the past year. This is closely followed by South Kensington / Knightsbridge (SW7) (£1,177) and the Stand / Holborn (WC2) (£1,157).

However, there’s still hope for those wanting to rent in London on a tighter budget, with 17 areas in the city available for under £600, including Abbey Wood which offers the cheapest average rent (£531pcm), Manor Park (£541pcm) and Chingford (£542pcm).

Matt Hutchinson, communications director for SpareRoom, said: “House prices may have stalled but rents are on the up again.

“The ongoing Brexit mayhem might be putting people off buying or selling but renters still need to move.

“With that in mind it’s no surprise London continues to show solid growth, but if this 4% rise is a reflection of what’s to come, we’ll see renters hit their affordability ceiling and be forced further out the capital, especially as Crossrail, when it’s finally complete, likely to drive rents up in the east and south east of London.”

The table below shows how room rents have risen across the UK and in London over the past year: 

 

This table shows the most expensive post towns to rent a room in the UK (outside of London), based on rents in Q1 2019:

 This table shows the least expensive post towns to rent a room in the UK, based on rents in Q1 2019:

 

 

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Landlords ordered to pay more than £5k after letting flat with no windows

May 1, 2019

Two landlords have been fined for letting out a flat that had no heating or windows.

The flat, located above commercial premises, on Brook Street in Chester, CH1, contained a number of serious fire hazards.

Sandeep Jarjapu, of Belgrave Street in Chester, and Nattha Gohill of Seller Street in Chester, were prosecuted for failing to comply with a prohibition order served under the Housing Act 2004.

Following an inspection by safety officers in December 2017, a prohibition order was made, banning the landlords from renting it out, but a subsequent inspection in June 2018 revealed the property was occupied.

The pair must now pay £5,286 following a successful prosecution by Cheshire West and Chester Council (CWaC).

Maria Byrne, director of Place Operations at CWaC, said: “As a council we are very keen to ensure that tenants living in the private rented sector are housed in properties that are safe and free from hazards.

“We will not tolerate landlords who choose to house their tenants in property that is not fit for human habitation.”

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New ‘Tenants’ Tools’ launched by Marks Out Of Tenancy

May 1, 2019

Marks Out Of Tenancy, a letting review website, has launched ‘Tenants’ Tools’ for tenants to securely keep any tenancy-related images and documents securely in one place.

The system records and shows the exact dates and times that the images were taken and if the user has the ‘Save Location’ feature enabled on their mobile when they take the images, the system will save the exact location the picture was taken.

There is also storage for all their tenancy related documents, including tenancy agreement, EPC, gas safety certificates, letters from the landlord.

Folders are used to keep everything organised, listable by name or date created.

When it comes to moving out, everything can be downloaded with a click of a button, compressed to save storage space and sent off the deposit agency.

In the coming weeks Marks Out Of Tenancy is adding Contacts, Notes, a Notice Letter Generator, the ‘How To Be A Good Tenant’ guide, Rights and Responsibilities and more, making the site even more useful to renters across the country.

Ben Yarrow, CEO of Marks Out Of Tenancy, said: “By helping tenants keep all their information in one place Marks Out Of Tenancy aims to reduce the number of end-of-tenancy disputes, saving tenants, landlords, letting agencies and deposit schemes precious time and money.

“Similar services exist for landlords and letting agents, now tenants can feel empowered and in control of their tenancies.”

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Increasing number of landlords ‘cautiously’ re-entering the BTL market

April 30, 2019

There has been a significant rise in the number of landlords re-entering the buy-to-let market after coming to terms with the ‘additional costs’ imposed by the government, according to haart.

The number of landlords offloading properties has soared over the past three years as a consequence of buy-to-let tax and legislative changes. But haart reports that this trend is now reversing three years on from the government’s decision to introduce a 3% stamp duty surcharge on the purchase of additional homes, including buy-to-let properties.

According to haart, landlord registrations are up 8% on the month across England and Wales, led by a 12% gain in London.

Sale prices to landlords are down by nearly 12% on the year, which partly explains why transactions across England and Wales are up 11% compared to March 2018.

Paul Smith, CEO of haart, said: “Three years on from George Osborne introducing the 3% hike in stamp duty surcharges on second homes, landlords are beginning to come to terms with the additional costs and are cautiously entering the market again. Our branches across England and Wales saw a monthly uptick of 7.9% in the number of landlords registering to buy, a figure which has been continuing to grow since the start of 2019.

“Interestingly, sale prices to landlords are down by nearly 12% on the year which may be spurring on this activity, these price decreases could be causing the available stock to fall within lower stamp duty thresholds, making the stamp duty levy a little easier to stomach. Despite this, landlords are not back in their hundreds, the number of registrations is still down 22% on the year. Whilst some brave souls are re-entering the market, the hammering buy to let investors received in terms of various tax changes is still fresh in many of their minds.

“Clearly investors are recognising the value that can still be found in buy-to-let property, especially in comparison to the overvalued and faltering stock market. Although the property market hinges on confidence, the FTSE 100, gold and cash are far more volatile to socioeconomic impact, so investors are increasingly returning to property where they deem their money safest, and where the yields are highest.

 “The market as a whole continued to gain momentum in March as the pent up demand from a delayed Brexit continued to drive transactions. Transactions are up 11% on the year whilst new buyer registrations boomed by 23%.”

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Replacing leasehold with commonhold – put your views to the housing minister

April 30, 2019

In recent weeks our campaign to replace leasehold with commonhold has continued to gather momentum both in the press and across social media.

As part of our efforts to support this worthwhile cause, we’ve so far outlined the major issues faced by leasehold landlords and homeowners and chronicled the nationwide battle to make the system a fairer one. We’ve also spoken to a range of industry experts who gave their views on the flaws of the current system and why commonhold is a viable alternative.

Now, in the third part of our ongoing campaign, we are giving our readers the chance to put their questions on leasehold and commonhold directly to Heather Wheeler – MP for South Derbyshire, de facto Housing Minister and a key figure at the Ministry of Housing, Communities and Local Government.

While the government has talked tough on ending abusive and unfair leasehold practices since 2017, when the full scale of the leasehold scandal was first revealed, it has still been short on action.

Feedback to the consultation on ‘Implementing reforms to the leasehold system’ – which closed in November last year – is still being analysed, with the most decisive action taken by the government so far being a recent industry pledge, announced by Housing Secretary James Brokenshire, to end toxic leasehold deals.

The government previously promised to ban leaseholds on all new-build homes, but recent Land Registry figures suggest some 26,000 new-builds were sold on a leasehold basis in 2018, while separate findings from OkayLah.co.uk found that a total of 25% of all properties sold through Help to Buy in England since the government scheme began have been done so on a leasehold basis.

Findings such as this embolden those who accuse the government of merely paying lip service to the leasehold scandal, with many expecting genuine leasehold reform to still be some way off, particularly with the distractions caused by Brexit and other housing issues. If anything, it’s the Law Commission who are doing a lot of the legwork on leasehold reform, with plans for a radical reshaping of the system, the recent publication of its consultation on commonhold reform, and its proposals for a final report, and assisting the government with the implementation of its recommendations, at some point in 2019.

With the government still working on its response to the consultation on how to reform the leasehold system, there is every chance it could be next year before any concrete proposals are revealed. But is the government being too slow in its response or just carrying out due care and attention on an incredibly important and emotive subject?

Who is to blame for the leasehold scandal and is the government doing enough to protect leasehold landlords?

And why are new-build homes still being sold as leasehold nearly two years after the government said it would ban this practice?

Additionally, is commonhold the best alternative to the current system? Or are there other solutions that should also be considered?

If you’ve been badly affected by the leasehold scandal and would like your voice heard by a government minister, or if you just have a strong opinion on the matter regardless of personal involvement, this is the chance to send in your questions.

Please leave a comment underneath this article to get the discussion going. Alternatively, you can email press@landlordtoday.co.uk, send a tweet to @Landlord_Today or post a question on Landlord Today’s Facebook page.

We will then collate these questions and they will collectively be put to Heather Wheeler. We will report back at a later date with any official responses from Wheeler and MHCLG appearing in the breaking news section of this site.

Words by Matthew Lane, Angels Media. 

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Abolishing Section 21 could adversely affect housing supply

April 30, 2019

The government’s proposal to scrap Section 21 of the 1988 Housing Act is likely to deter many people from investing in the buy-to-let sector and encourage existing landlords to exit the market, thus adding to the housing shortage crisis, according to Just Landlords.

The landlord insurance provider fears that the government’s plans to abolish Section 21 in a bid to end so-called ‘no-fault’ evictions will have a major impact on the market.

Removing the ability to evict with Section 21 will undoubtedly concern many buy-to-let investors, especially smaller landlords, which could result in a rise in evictions in the short-term, as landlords look to exit the market.

Rose Jinks, spokesperson for Just Landlords, said: “If the government does decide to scrap Section 21 completely, then landlords will need support on how to regain possession of their properties in legitimate circumstances, such as when they need to sell.”

“We are concerned that this latest change to legislation could further deter landlords from investing in the private rental sector, as we have seen recently, which could dampen housing supply and make it more difficult for tenants to find homes.

“What we’re most concerned about is how this will negatively affect tenants in the long-term. We fully support the Government’s aim of improving tenants’ rights, but the effects need to be considered before any changes are implemented.”

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Number of homes for sale hits record low during March

April 30, 2019

But-to-let landlords thinking about expanding their property portfolio will find that the sustained drop in the number of new homes for sale reported by estate agents has continued to fall steeply.

According to NAEA Propertymark, the flow of new sales listings coming to market contracted to an all-time low in March.

An average of 37 properties were available to buy in March, down from 34 in February, while the number of house hunters registered per estate agent branch rose by 17% in March, from 252 to 296.

This supply-demand imbalance is likely to shore up property prices moving forward.

The number of sales agreed per member branch remained at seven in March, the same level reported for the previous two months. Year-on-year, it was down slightly from eight in March 2018.

Mark Hayward, chief executive, NAEA Propertymark, commented: “Despite the fact that activity in the housing market increased in March, the levels of supply and demand recorded aren’t where we would expect them to be at this time of year.

“It’s clear buyers and sellers are still feeling cautious and holding off on making any decisions in light of the current political climate and economic uncertainty. However, recent house price data indicates we might see confidence in the market grow as house prices slowly begin to return to previous levels and we edge closer to the summer months.”

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Pepper Money revamps rates and cuts cost of valuation fees

April 30, 2019

Pepper Money has revised rates across its buy-to-let and residential products and reduced the cost of valuation fees.

The specialist lender has cut some rates by almost 1% and customers now have the option of a £0 completion fee.

Six month ago, Pepper simplified its criteria for borrowers with adverse credit and set up ‘tiers’ — ranging from Pepper 6 to Pepper 48 — depending on how recent the borrower’s county court judgements, mortgage or secured loan missed payments and arrears appeared on the client’s credit file.

The number on the policies reflect the time frame, in months, during which a client must have no defaults or arrears to qualify for the offer.

In its latest move, rates on Pepper's buy-to-let range have been reduced.

Customers who fall into the 'Pepper 6' category can now get a 70% loan-to-value (LTV) at 4.98% - a 0.89%reduction - while the rates on a ‘Pepper 12’ buy-to-let mortgage at 75% LTV has dropped 0.8% to 4.88%.

Pepper has also cut the cost of valuation fees and reduced some valuations by £200.

Paul Adams, sales director at Pepper Money, said: “At Pepper Money, we constantly review our products to ensure they give brokers the tools they need to find a home for their interesting cases, and our latest changes give the duel benefit of greater choice with more simplicity.

“We have also lowered some upfront costs and introduced a new £0 completion fee option, which I know will be well received and is also ideal for clients who want to borrow up to the maximum LTV and would have otherwise had to add the fee to the loan.

“As well as this, we have cut the price on some of our products, including some five-year fixed rates, which are popular among clients looking for longer term certainty and to maximise their affordability.”

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