Why would Croydon have the public removed from a licensing meeting?

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Croydon Council’s agenda for last Monday’s Licensing Sub-Committee states:

“Exclusion of the Press and Public

The following motion is to be moved and seconded where it is proposed to exclude the press and public from the remainder of a meeting:

“That

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Agents feeling the heat in a sluggish property market

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Tough Trading Conditions:

National estate agency group Countrywide saw its shares plunge yesterday after the group announced an emergency fund raising exercise at a big discount to its previous share price. Its stock has declined in value from over £1 per share in June to just under 20p today.

Countrywide, one of the UK’s largest estate agency chains, is in difficulties because of a stagnating house sales market, challenges from new online entrants to its space, and a debt burden of £212m. An attempt to raise £250m through the issue of a high-yield bond failed to materialise earlier this year. The group made a £206m loss for the six months to June this year.

The share price drop Thursday, it would seem, is a reaction to its move to raise £111m through a firm placing of more than 1bn shares at 10p each, and a proposed additional £28.6m open offer placing. The 10p price is a big discount to its close price of 50p the day before. After a drop of something like 80% since January, the new offer will result in considerable stock dilution for existing investors.

Owners of leading brands in the property sector such as Hamptons International, Bairstow Eves and Chappell & Matthews, Countrywide shares hit a low of 10p at one point on Thursday.

However, Countrywide chairman, Peter Long told The FT:

“This is a once-and-for-all step, underpinned by a credible recovery plan.

“A business like Countrywide with high operational and financial gearing is not a very good cocktail, we’ve been clear about that. But this is no longer a business under capital structure pressure.�

International investment fund manager Oaktree Capital, a private equity group that owns around 30% of Countrywide’s shares, had agreed to buy £24m of new stock. However, it will not be taking up this full allocation, so in the process its stake will be diluted to 19 per cent.

The slow property market will not help the company to implement its planned three-year recovery plan as it reduces its head office staff by a head count of 150, around one-third of its head office staff, while planning to build up branch staffing levels.

Other property related companies have also been feeling the heat with market leading property portal Rightmove seeing its share price tumble by around 20% in July. Analysts at international banks UBS and Berenberg have advised investors to take profits and have cut the website operator’s rating from ‘hold’ to ‘sell’, stating that there are just “too many risks�, with agents feeling the heat.

With OnTheMarket and Zoopla as strong competitors, Rightmove is operating in a market that relies too heavily on price increases whenagents’ own margins are under pressure.

An analyst report by Berenberg says that estate and letting agents are both feeling the heat:

“One only needs to look at the share prices of listed estate and letting agents to get a sense of the troubles that some players are currently going through.�

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Tonight on Channel 5 at 8pm, Bad Tenants, Rogue Landlords

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In Waltham Abbey a seemingly perfect professional tenant, an estate agent, wins the trust of a Landlord in dire straits, by using false references.

The landlord,  Anthony, previously lived in and owned the flat with his ex-partner. With nowhere else to live after a difficult break up and with no money coming in from his tenant who refuses to pay

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Liverpool council granted my licence for less than 5 years?

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I am looking for legal advice as Liverpool council granted my licence for less than 5 years. This is their replay. I am aware it’s up to 5 years, but there is no reason why I shouldn’t be granted 5 years licence when I only bought my house in 2018.

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Bank Rate Rise – Bank raises rate to 0.75%

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Breaking News:

The Bank of England has today raised its base rate for only the second time in 10 years, in what appears to be a slow but inexorable trend. The rate has risen by 0.25% to 0.75%. This will be the highest level it’s been since March 2009 – see chart.

The expected increase in May never came as the economy was going through a bit of a dip after the harsh weather in the first quarter. But although inflation appears to be well under control, and wage inflation is still low, The Bank’s Monetary Policy Committee has taken some commentators feels is a bold step.

However, Mark Carney and the MPC now confident enough to raise the rate a notch, concluding that the dip was temporary, one and that economy is growing again, boosted by the good weather over the spring and summer. This view is supported by sustained household spending despite a spate of store closures over the preceding months.

The move will increase the interest costs for anyone with a variable or tracker mortgage, but it will come as a welcome relief and a sign of things to come for those savers who are dependent on income from their investments.

Angus Stewart, Chief Executive of Property Master, said of today’s Bank of England Monetary Policy Committee decision to raise the base rate:

“A rise in base rate has been trailed for quite some time so today’s announcement will not come as a surprise to many.  The economy seems to have recovered its bounce following bad weather earlier on this year and this better economic data has finally forced the hand of the Bank. “

Source: Bank of England

Mr Stewart continued:

“Our recent July Mortgage Tracker which follows rates and fees from 18 of the largest lenders in the buy-to-let market showed that the cost of popular buy-to-let fixed rates deals has continued to fall since the start of the year.

“Five-year fixed rate mortgages have been particularly competitively priced with the monthly cost of borrowing a typical amount of £150,000 falling between £11 and £24 compared to the cost if the loan had been taken out in January.

“Given today’s news of a base rate rise landlords who are looking to borrow to buy a new property or refinance their existing portfolio may need to move very fast indeed if they are going to benefit from some of the good deals we have seen.�

About Property Master

Property Master launched in May 2017 and is the UK’s first and only digital mortgage brokerage service for UK buy-to-let landlords. Its innovative approach enables private landlords to take control of their financing online for the first time by matching their requirements on Property Master’s unique and complete database of mortgage information and lending criteria. Founded by a group of highly experienced financial services professionals, the company is directly authorised and regulated by the Financial Conduct Authority (FCA).

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Bank of England Base rate up to 0.75%

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The Hawks have it. The Bank of England’s Monetary Policy Committee have voted unanimously to increase the Base Rate by 0.25% to nearly a decade high of 0.75%

Given the economic outlook, productivity gaps, strength of the pound and Brexit uncertainty I see this as a short term decision if not possibly one that will be undone later on down the road.

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No mortgage choice for portfolio landlords

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My broker has just come back with a long list of No’s

Skipton – maximum 10 properties in a portfolio
Accord – maximum of 15 properties but maximum of 10 with mortgages on them
Virgin – Maximum of 10 properties in a portfolio
Santander – do not accept clients with more than 4 properties
Leeds – maximum of 10 properties in a portfolio
Barclays –

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Government regulation is pushing landlords into short-term lettings

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Holiday Lets:

Calls for more and more regulation of buy-to-lets: increasing taxation, longer-term tenancies and rent controls are beginning to grab the average landlords’ attention. Under these circumstances landlords will inevitably start look to alternative business models, or in the worst case scenario, to abandon the private rented sector altogether.

All this is putting extreme pressure on the private rented sector (PRS), it is compounded by some landlords opting to switch to the less regulated holiday let market. It will inevitably lead to an even greater shortage of suitable rental accommodation for the traditional rental market, and as everyone knows, shortages lead to increased prices – rents will climb for the average private tenant.

At a time when private landlords are urgently needed to provide accommodation for a generation struggling to buy, government policy, perhaps influenced by public opinion and political imperatives, it would seem, provides only discouragement to the buy-to-let investor.

It would seem a perverse way of managing a housing market economy when renting is the only option for many, and when social housing provision has fallen away, by making landlords jump through more and more regulatory hoops, to just stay still, or even fall back in terms of income.

John Blackwood, chief executive of the Scottish Association of Landlords (SAL), writing for the Edinburgh based CityLets’ Quarterly Report Q2 2018, says:

“Without a doubt what we need is more supply of private housing to meet the needs of our increasing population. With a lack of social housing and difficulty for many in getting on the home ownership ladder, people have no option other than to look to private landlords for their next home.

“This pressure on the sector, coupled with landlords opting to let to the holiday market may be contributing to increased rents and difficulties for many in finding a home.

“Whilst it is easy to listen to the lobby for rent controls we must understand that rising rents are a symptom of the problem and not the problem in itself.�

The Scottish government introduced new tenancy rules through its long awaited Private Housing (Tenancies) (Scotland) Act 2016, which commenced on 1 December 2017. It puts the country ahead of England and Wales if the direction of travel is now to increase tenant’s rights and security of tenure, at the expense of landlords’ control of their businesses.

It does appear that the UK as a whole is planning to travel in that direction, with the already introduced new regulations and proposed tenancy laws. So who can blame landlords for looking at alternative ways to make better returns with far less hassle?

Why would any investor put their hard earned cash into investments which effectively remove their ability to control their own business, impose an onerous administrative regime, and at the same time make it more difficult to make a reasonable return on their investment?

With increasing demand for short term holiday lets and Airbnb type lets from the public, particularly in the big cities and tourist locations, there is the potential to improve profitability for many landlords. But there is also the fear that this trend could lead to disruption to local communities, and for landlords, that this loophole could also be closed.

Mr Blackwood says:

“With the holiday let market practically unregulated and offering tax advantages to landlords, it is no surprise that many landlords are moving from the highly regulated long term housing market to offering only short term lets to tourists.

“The answer must be to get our priorities right, providing homes for people should be key. Both the Scottish and UK governments need to recognise that a well-functioning and well balanced private rented sector is what we want to achieve, rather than rushing to regulate – which seldom works.â€�

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Government regulation is pushing landlords into short-term lettings | LandlordZONE.

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Course of the Month: Basic Electrical Awareness

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Our course of the month is Basic Electrical Awareness. Electrical safety in the private rented sector is something that has come to the fore in recent weeks, with the Government recently announcing that it is going to be mandatory for landlords to carry out electrical safety checks in their properties every five years. The RLA […]

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TDS focuses on technology and customer service

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Tenancy Deposit Scheme (TDS), the country’s first deposit protection provider, has appointed two key senior figures to deliver further improvements to customer services through technology.

François Josserand takes on the role of Chief Technology Officer (CTO) while Louise Walton joins as Head of Customer Experience.

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