The scrapping of Section 21: landlord responses

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Given that the Government appears to be rushing to scrap Section 21s possibly before the end of this year (and notwithstanding any change Boris Johnson might make to this if he becomes and stays as Prime Minister for any length of time)

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Government plans for deposit passporting

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More than 4 million people live in the private rented sector, yet when moving home, some tenants can find it a struggle to provide a second deposit to their new landlord, risking falling into debt or becoming trapped in their current home.

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Portfolio landlords now average 13 properties

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Portfolio Landlords:

Buy to let lender Paragon’s recent research shows that professional
and larger-scale landlords are still investing and are increasing the size of
their portfolios through more targeted investments.

With an average portfolio size for these types of landlords now
at 13.1 properties, their average size is up from 12.8 properties in just three
months. This puts the value of the average professional landlord’s portfolio at
£1.76m, the highest ever recorded.

This trend defies all the changes and ongoing pressures on buy-to-let
landlords, in an operating environment that has seen big changes to the taxation
rules and a big increase in the complexity and scope of the regulations
affecting the sector.

Paragon’s quarterly survey of the buy to let market shows
that these professional and larger scale landlords are roughly three times as
likely to be purchasing another buy to let in the next quarter than are smaller
scale landlords.

HMO (Houses in Multiple Occupation) purchases have also been
on the up. The number of landlords considering purchasing an HMO purchase is up
from 5% of landlords to 20% says Paragon.

Paragon’s reading of the evidence points to prospective buy
to let buyers generally having more experience of the industry, and with an eye
to improving the average income yields of their portfolios. This is a result of
trying to overcome the negatives of the tax rules.

The survey covered some 200 experienced landlords. It shows that
the number of landlords operating between 11 and 20 properties is beginning to
grow, now accounting for 18% of this sample, which Paragon claims is up from 14%
three months ago.

But, says Paragon, despite these findings, overall landlord
sentiment remains subdued with only 13% of the respondents feeling optimistic
about the future. Landlords are being cautious about their overall financial
position. Debt levels are down to just over one-third of the average portfolio value
says Paragon.

Director of Mortgages at Paragon, John Heron says:

“Professional landlords with larger portfolios make up the
backbone of the UK’s Private Rented Sector and it is encouraging to see them
continue to build their property portfolios.

“However, with a heightened interest in higher yielding
property types and an increasingly prudent approach to financial management, it
is clear that landlords are proceeding cautiously as they seek to head off the
twin challenge of higher tax and growing economic uncertainty.�

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Portfolio landlords now average 13 properties | LandlordZONE.

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Date with MP to discuss Sect 21

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I have (at last) managed to secure a surgery appointment with my MP in regard to the proposals to scrap Section 21.

I’m going in armed with as much info as possible and clearly will be talking from personal experience to date.

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Professional Landlords still proceeding cautiously

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Paragon’s latest quarterly survey, which tracks the experience of more than 200 seasoned landlords shows that landlords now have an average of 13.1 properties in their portfolio, up from 12.8 properties three months ago.

Larger scale landlords are continuing to make targeted investments to optimise their position according to Paragon’s PRS Trends Report for Q2 2019

Underlying these headline figures

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They are not making anymore of it

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Land that is! Left Wing Organisations such as Shelter are very destructive in their comments and policies but need to understand they really must be Constructive not Destructive!

The added numbers of young families needing to be housed is greater than the on-stream supply of houses.

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Government review highlights lack of data on landlords

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Landlord licensing:

With the doubling in the size of the private rented sector
since 2002, the sector now houses 19% of all households. This industry requires
considerable effort on the part of local authorities to maintain the housing standards
to which tenants are entitled, and as of 1^st of January 2019, 44
local authorities operate selective licencing schemes.

Licences specify conditions to which the landlord must
comply, and the authority inspects and enforces compliance. The licencing schemes
are funded by landlord fees covering the initial application process and ongoing
enforcement.

A recent review of selective landlord licensing, commissioned
by government, concludes that a lack of data on the sector hinders enforcement,
and that this could be remedied by having a national landlord register.

The review, which was carried out by Opinion Research
Services, described the selective licensing scheme as an “effective policy
tool� but identifies many weaknesses and suggests that a national landlord
register could provide access to more data which would complement the various schemes.

A national landlord register would “provide easy access to
data� on which to base decisions as to who should have a licence.

Such a register would mirror the situation in Scotland were
a landlord registration scheme has been in operation for some time. Without such
as register the report argues, it is not possible to identify unlicensed
properties and it would give a “far more accurate enumeration of the private
rented sector at the planning stage�.

New regulations are already planned for letting agents, so
they may be out of the scope of any such reform, but by having all private
landlords register, and the report suggests, there is a “significant appetite
for such an initiative�, selective licencing and enforcement could be far more
effective.

Several other recommendations emanate from the report, of
which these are a few, see the link below:

• Government should consider issuing best practice/guidance
  as appropriate to support local authorities and improve the implementation of
  schemes.
• local authorities should charge for the
  enforcement element of the licence fee reflecting remainder of the licnence designation
  period on a pro-rata basis.
• mandatory licences should be amended to include a
  requirement on property condition and the absence of serious hazards
• A “light touchâ€� renewals process would be
  introduced for existing schemes.

A Ministry of Housing, Communities and Local Government
spokesman said:

“Select licensing has made a real difference to areas across
the country. This report further demonstrates that with proper planning,
consultation and implementation, these schemes can make a real difference to
the quality of homes people live in.

“The report does highlight some important matters which
require further consideration, and we will work with the sector to continue to
understand their concerns before responding fully.�

However, John Stewart, policy manager for the Residential
Landlords Association (RLA), has argued that such a register would not work in
the way this report envisages.

He has been quoted as saying:

“Ministers have repeatedly made clear that a national
register of landlords would become an unnecessary and costly additional layer
of bureaucracy.

“We agree. All it would become is a list of good landlords
which brings us no closer to finding the crooks that operate under the radar.

“Selective licensing has become a replacement for lost
central Government funding and provides no assurances to tenants about the
quality of accommodation.

“Properties do not need to be inspected before a landlord is
given a licence and the RLA has found that many councils are charging
eye-watering sums of money for almost nothing in return.

“Local authorities need the will and the resources to put
real effort into finding the criminal landlords who never come forward to make
themselves known.

“That means using a range of information they can already
access including council tax returns, information on tenancy deposits and
benefit data to root out the minority of landlords who bring the sector into
disrepute.�

An Independent Review of the Use and Effectiveness of Selective Licensing

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Government review highlights lack of data on landlords | LandlordZONE.

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Don’t Panic ARLA

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The Tenant Fees Act 2019, which came into force on June 1st, is causing concern amongst landlords and agents. ARLA Propertymark, which represents residential letting agents and has over 9,000 members, appears to be panicking and giving out wrong advice.

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Back by popular demand

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PIP is delighted to offer another opportunity within this elegant, high specification refurbishment, located within the sought after L25 postcode of Gateacre.

We have been able to secure a discounted price exclusively for our investors on a stunning, 

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Selective Licensing review disappointing – ARLA

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David Cox, Chief Executive, ARLA Propertymark responds to the Government’s Selective licensing review commenting:

“It’s disappointing that the long-awaited review on Selective Licensing recommends the continuation of the schemes. Licensing schemes do not work, and never will. They are not an effective way of promoting higher quality accommodation and introducing landlord registration will not be the silver bullet to improve the effectiveness of property licensing.

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