Cheap BTL needs Housing Association?

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My son has only £25000 to invest in property which means looking in the North East where good returns can be made if the rent is paid!

​To be safe we think we have to rent to a Housing Association and I’m wondering if landlord readers have done this successfully.

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Buy-to-Let Lending thrives at Paragon

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Mortgage Lending:

Paragon Banking Group, the buy-to-let specialist mortgage lender, has reported a 65% year-on-year increase in new advances across all business lines so far this year.

Within this total, Paragon’s mortgage lending grew by 84% to £367 million, with buy-to-let advances up 85% to £343 million. Second charge and specialist residential lending grew by 74% to £24 million.

In the buy-to-let market, Paragon says it has increase its share of the more specialist portfolio landlord business; this, says the lender, is despite a backdrop of lower year-on-year lending volumes in the market overall.

2017 was a very challenging year for the buy-to-let market, with tax and regulatory changes bearing down on landlords. Paragon’s figures include the first stage period of the phasing out of mortgage interest relief from April 2017, but despite this, so far in 2018 the Paragon Banking Group has posted a sharp rise in lending as it continues to support buy-to-let landlords.

The performance is also despite the Prudential Regulation Authority’s (PRA) implementation of its new stricter lending criteria for underwriting, particularly for more the complex mortgage applications, in September 2017. This led to a realignment of competition, with some of the mainstream lenders leaving the buy-to-let portfolio segment or the market, or offering only a limited proposition.

The mix of Paragon’s buy-to-let completions now includes 66% of loans to landlords with more complex portfolios – larger portfolios, HMOs and commercial. The impact of the PRA underwriting rule changes from September has had a profound impact on application flows during the quarter, with the mix in the pipeline at 31 December 2017 moving to 79% complex portfolios. The pipeline rose from £604 million at 30 September to £619 million at the end of December, says Paragon.

John Heron, Managing Director of Mortgages at Paragon said:

“Paragon was the first lender to offer buy-to-let mortgages over 20 years ago and has developed its specialist capability around professional landlords over many years. It is very well aligned with the developments we have seen in the market following changes in government policy and regulation in the sector and this has allowed Paragon to significantly increase lending to portfolio landlords with more complex requirements.

“We are continuing to focus on product and technology developments that will deliver improved products and services to our landlords and intermediaries with the roll-out of new mobile applications and document upload over Q2.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Buy-to-Let Lending thrives at Paragon | LandlordZONE.

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Mortgage Express transfer to Rosinca Mortgages – anyone else?

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My wife and I have just had a letter from Mortgage Express to say that our 11 Buy to Let loans are being transferred this month to Rosinca Mortgages a trading name of Topaz Finance ltd.

Our loans are on the beloved tracker rate.

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Rogue landlord family ordered to repay thousands

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The Shah family of landlords who crammed 31 tenants into a Wembley “shed” are being ordered to repay a large sum of rent money collected from tenants. They are thought to have made hundreds of thousands of pounds accommodating tenants in slum-like conditions.

Mother and daughter Harsha and Chandani Shah and Mrs Harsha Shah’s brother, Sanjay Shah are said to have kept their tenants in dangerous conditions in a four-bed Napier Road, Wembley property, in contravention of licensing and the Management of HMO Regulations 2006.

At Willesden Magistrates’ Court on May 23 last year the family was found guilty of the HMO licencing and management offences and ordered to pay £35,000 in court costs, and on January 31 this year Harrow Crown Court ruled that Brent Council can use the Proceeds of Crime Act (POCA) to recover criminal gains from the landlord family in a landmark court case set for later this year.

Jaydipkumar Valand, who collected the rent for the Shah family, had pleaded guilty at trial in December last year and has since lost his appeal against his conviction for contraventions of the Management of HMO Regulations 2006. Sanjay Shah lost his appeal on the 5^th of January this year against a charge of aiding and abetting breaches of the selective licence scheme under which the property came.

It is likely the Shah family will face a heavy confiscation order to claw-back much of their rental financial gains.  It is thought that the confiscation order for their racketeering will be in the region of hundreds of thousands of pounds.

Jaydipkumar Valand, who collected rent for the family in the region of £112,000 from 2015 to 2016 and was found guilty at trial last year, may also be ordered to repay any financial benefit gained under the same POCA ruling.

Councillor Harbi Farah, Brent cabinet member for housing and welfare reform, has said:

“This is a landmark legal decision for our zero tolerance policy against rogue landlords.

“We will use all the powers we have to put an end to tenants living in misery, and this includes the Proceeds of Crime Act.

“We want to work with landlords and agents to improve the standard of living in the private rented sector, and we urge those responsible to licence their properties and comply with licensing conditions.”

Counsel from Prospect Law, Edmund Robb, who represented Brent in the hearing, has said:

“This judgment represents a landmark ruling from the Crown Court which allows local authorities to initiate confiscation proceedings under POCA 2002 for criminal offences linked to safety and amenity regulations.

“Rogue landlords cannot now hide behind previous case law to avoid being required by the courts to pay back rents and other benefits obtained whilst their tenants lived in squalid and dangerous conditions.”

A public register of rogue landlords and agents is soon to be made available to London tenants and a private one will be available for council scrutiny.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Rogue landlord family ordered to repay thousands | LandlordZONE.

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How To Corporatise Your Property Business – One Day Workshop

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10th Feb Workshop – SOLD OUT
17th Feb Workshop – SOLD OUT
17th March Workshop – PLACES AVAILABLE 

Our first ‘How To Corporatise Your Property Business’ workshops of 2018 will be held in February.

The workshop takes you through the process of incorporating your personally held property portfolio into a limited company without capital gains tax or stamp duty

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Landlord Bodies meet minister to discuss future of PRS

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Future of PRS:

A meeting has taken place (Thursday 8^th February) to discuss future legislative changes, between the Minister for Housing & Homelessness at the Department of Housing, Communities and Local Government (DHCLG), and the main representative bodies for landlords and letting agents in the private rented sector (PRS).

Representatives from The National Landlords’ Association (NLA), The Association of Residential Letting Agents (ARLA Propertymark), the Royal Institution of Chartered Surveyors (RICS), the National Approved Letting Scheme (NALS) and the Residential Landlords Association (RLA), met with the Minister, Heather Wheeler MP, to discuss what these organisations think should be the Government’s priorities for the PRS.

The NLA’s CEO Richard Lambert reports that the meeting was conducted with a wide-ranging discussion, touching on all aspects of the sector, from the regulation of letting agents and the banning of letting fees, to security of tenure and previous proposals to a specialised Housing Court to improve access to justice.

Mr Lambert addressed the issue of standards in the sector, welcoming the Government’s support for the Fitness for Human Habitation Bill and urged the Minister to prioritise enforcement activity to tackle the rogue operators who undercut the vast majority of good landlords and bring the sector into disrepute.

Mr Lambert says these calls echo those recently made by the NLA Chairman, Adrian Jeakings, to the Communities & Local Government Select Committee which is currently undertaking inquiries into the private rented sector and the draft Bill to ban letting fees.

The year ahead will see a great deal of change in the PRS, with plans to extend mandatory HMO licensing, consult on introducing longer tenancies, and make minimum energy efficiency standards less lenient.

Mr Lambert pressed the Minister to think beyond simplistic calls for longer tenancies, and look at how best to incentivise landlords to offer a wider range of tenancies to cater for the increasingly diverse range of what tenants may need.

Richard Lambert, said:

“I welcome the Minister’s willingness to talk to the NLA and other private rented sector representative organisations. With its self-professed focus on tackling the housing crisis, it is vital that the Government recognises and supports the prominent role that the private rented sector plays in housing over twenty percent of UK households.

“Through the forthcoming ban on letting fees and other proposals the Government has shown it is more than willing to intervene in markets when it perceives them to be failing consumers. We urge the Minister and her colleagues to work with the NLA and others to ensure that any intervention made is necessary, proportionate and maintains a fair regulatory regime within which landlords can continue to run their business.”

Fitness for Human Habitation Bill 

NLA’s written and oral evidence to the Committee

Full list of planned government consultations and changes

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Landlord Bodies meet minister to discuss future of PRS | LandlordZONE.

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Sold property but still being chased for council tax!

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Early in 2016 I obtained probate for a deceased relatives property and sold it at auction, but have just received two council tax bills for it. On checking the Land Registry entry I see that my deceased relative is still shown as the owner!

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New algorithms to calculate EPC ratings

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Many landlords have long suspected that the DCLG approved national calculation methodologies and software programs were seriously flawed when they produced EPC ratings for buildings following energy assessments.

So news that new software is being introduced which is claimed to be more accurate is to be welcomed by the landlord community. It could mean, according to the Residential Landlords’ Association (RLA) – which has campaigned for the change – that up to 80,000 private landlord rentals could be positively re-rated. It could make the difference between spending thousands on improvements to reach MEES standards, and not having to do so.

The new rules concerning Minimum Energy Efficiency Standards (MEES) come into force from April 2018. After April any new tenancy (which includes renewal tenancies) will require the property to have a minimum energy performance (EPC) rating of E. The new rules will also apply to all existing tenancies (periodic tenancies) from 1st April 2020.

The RLA claims to have been campaigning on the software issue for six years on the basis of empirical evidence from practitioners that the government software used to calculate EPCs was flawed.

Following the update the new RdSAP software issued to energy assessors should be more accurate and will in some cases change the EPC rating to a higher value.

According to the RLA these are the changes landlords can expect to see:

• ‘Non-traditional’ solid wall properties are expected to see the biggest improvement. These homes will typically have walls made of 330mm (13”) thick stone, mixed earth or brick and stone.
• Those with traditional 228mm (9”) solid brick walls will see a lower but still significant improvement.
• Filled cavity walled premises will see a reduced EPC rating, but it is very unlikely that many could go down into Band F.
• Homes with low rated Band G are unlikely there will be much movement.

Since it is 10 years since EPCs were introduced many properties will be coming up for renewal in any case, so a new assessment will not be an extra cost even if the property does not rate well enough to increase its rating.

However, since the whole exercise is to improve energy efficiency and reduce heating costs for tenants, landlords should look carefully at how their properties’ energy consumption can be reduced, with minimal improvement costs to them.

RLA company secretary, Richard Jones, says:

“This change comes after six years of campaigning by the RLA for a proper scientific appraisal of the insulation properties of walls.

“This led to the Building Research Establishment undertaking research that demonstrated that solid walls in particular provide better insulation for homes than was shown in the EPC rating.

“We are delighted the new software is now in use, however time is getting short and we would advise anyone who wants to get a new EPC carried out to do so as quickly as possible.

“It is also worth being mindful of the fact that the minimum requirements may change in the future and to consider including further energy efficiency improvements if you are carrying out renovation works.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – New algorithms to calculate EPC ratings | LandlordZONE.

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Bank of England holds rates steady at 0.5%

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Breaking News – Interest Rates likely to Rise:

The BoE’s Monetary Policy Committee (MPC) held rates at 0.5% at their meeting Thursday, but Governor Mark Carney warns that earlier and larger interest rises are likely in the coming months due to the need to damp-down the inflationary effects of a stronger global and UK economy.

The pound responded positively to a bullish quarterly inflation report that made it clear that inflation above the BoE’s 2% target will not be tolerated for the next three years.

In his letter to the Chancellor, Governor Carney, going off the bank’s latest forecasts, said: “monetary policy would need to be tightened somewhat earlier and by a somewhat greater extent over the forecast period than anticipated at the time of the November report”.

Following this BoE report the expectations are that the cost of borrowing will rise at the MPC’s next meeting in May.

Despite ongoing Brexit uncertainties, the BoE now seems increasingly confident that pay growth is already picking up in a tight labour market, with low unemployment and the prospect of higher UK productivity growth.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Bank of England holds rates steady at 0.5% | LandlordZONE.

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Base Rate stays at 0.5%, but rises may come sooner than forecast

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The Monetary Policy Committee (MPC) voted unanimously to keep the Bank of England Base Rate at its current level of 5%.

However, the sting in the tail is that excess demand is predicted to exacerbate the ongoing cost lead inflation levels of 3%.

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