Universal Credit issues behind arrears and repossessions rise

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Rent Arrears:

The release of the UK Finance (CML) Arrears and Possessions quarterly statistics, out yesterday, show that home owner mortgage arrears remain at historic lows. However, the number of buy to let mortgages with significant arrears (10 per cent or more of the outstanding balance) is up 3 per cent on last year.

Mark Pilling, managing director at Spicerhaart Corporate Sales, a company dealing with arrears and repossessions on behalf of lenders, says:

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

“Last month, the Residential Landlords’ Association revealed that 61% of landlords with tenants receiving Universal Credit have had problems with non-payment and arrears, and on average, these tenants owe 49% more than they did a year ago.

“Universal Credit has been plagued by problems since it was introduced, and while the Government announced in the Budget that more money will be dedicated to the new welfare system, it is clear that much of the damage has already been done. Many claimants experienced huge delays in receiving their money, forcing them into arrears, and many are receiving far less than they did with the old system, which means in many cases, they simply do not have enough money to pay their rent on their reduced incomes.

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

Buy-to-Let Mortgages & Re-Mortgages

Meanwhile, other statistics show that buy-to-let lending for the full year 2018 will fall below UK Finance’s original estimate of £12bn, to around £9bn, a 25% shortfall.

Taxes, tenancy regulations and other additional costs continue to have an adverse impact on the buy-to-let market and landlords’ pockets.

Speaking at UK Finance’s annual mortgage conference earlier this week, Jackie Bennett, director of mortgages said of the decline:

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

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

However, while new buy-to-let lending may be down, but re-mortgaging is set to exceed initial forecasts. According to UK Finance, mortgaging could hit £27bn this year, up £3bn on the January estimate.

UK Finance Mortgage Report

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Earl of Lytton reads briefings from Shelter and CA, but not ARLA!

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Cross Hereditary Lord The Earl of Lytton (Full name: John Peter Michael Scawen Lytton) was taking part in a House of Lords Tenant Fees Bill debate on the 5th November. The Earl admitted to reading briefings from Shelter and Citizens advice

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Earl of Lytton reads breifings from Shelter and CA, but not ARLA!

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Cross Hereditary Lord The Earl of Lytton (Full name: John Peter Michael Scawen Lytton) was taking part in a House of Lords Tenant Fees Bill debate on the 5th November. The Earl admitted to reading briefings from Shelter and Citizens advice

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The inaugural National LIS Awards, Thursday 15th November

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18:00 – 12:30 The Grosvenor House Hotel, Park Lane, London W1K 7TN

Brought to you by the organisers of the National Landlord Investment Show & publishers of Landlord Investor Magazine, The National LIS Awards celebrate excellence & professionalism in the private rented sector for landlords

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Homes (Fitness for Human Habitation) Bill 2018 – Letter of concern

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Open letter to Gareth Johnson MP:

Dear Mr Johnson,

There is a lot of support amongst landlords for the above bill that, as its aim, seeks to provide a means by which tenants in clearly substandard Housing ”

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St Helens Landlord fined £21,000

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Health & Safety:

A private landlord, who was renting to a family in the Collins Green district of St Helens, has been fined over £20,000 because of a persistent failure to make health and safety improvements.

She failed to make the improvements after the council issued improvement notices, which fall under the Housing Act 2004. The required repairs to the property were to rectify a number of health and safety issues, including dangerous electrics and damp.

She also failed to comply with a notice requiring her to fit smoke alarms, resulting Warrington Council attending to fit the alarms. For this offence a fixed penalty fine of £1,000 was issued.

Warrington council says it is working with landlords and its private sector housing enforcement team to carry out inspections and a range of work to tackle disrepair and health and safety issues in landlords’ properties in the borough.

A council spokesperson told the St Helens Star that the team is working closely with landlords to resolve all issues that are reported to them. The spokesperson said that the majority of local landlords want to work with the council, but those landlords that do not co-operate could face severe consequences, including heavy fines. Under new legislation, councils can now impose fixed penalty fines of up to £30,000.

Cllr Maureen McLaughlin, Warrington Council’s executive board member for public health, said:

“We are sending out a clear message to bad landlords that failing to ensure your properties are safe and healthy for your tenants will not be tolerated.

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

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

Reminder about Smoke Alarms

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Halifax House Price Index slows to 1.5% growth

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Prices in the three months to October were 1.5% higher than in the same three months a year earlier, slowing from the 2.5% annual growth recorded in September, and recording the lowest rate of growth since March 2013.

House prices in the latest quarter (August –

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Property118 makes PIA finals – Thank you members and readers

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We are delighted to confirm that Property118 are finalists in the Property Investors Awards 2018 for the category of Property Website of the Year.

Click Here to view the full finalists page.

This year the Property Investors Awards received more nominations than any other year.

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PRS Debate – Government Intervention

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An hour wasn’t long enough for this debate, and like a football fan watching his team losing on National TV I was incredibly frustrated watching it. Many key issues were glossed over, in particular the subject of Selective Licensing which the two largest competing landlords associations oppose each others views on and both are which are pro and anti in different areas of the Country.

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Flexible Ltd Co BTL criteria, Undervalue Transactions and more!

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From time to time, a lender comes to the fore because of their flexible underwriting and/or unique criteria points.

One such lender is Magellan. They popped into our office last week, and they just kept coming out with one gem after another.

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