Article 4 direction approved in Northampton

admin    Uncategorized     agents

Landlords in Northampton who want to covert houses into small HMOs will be required to obtain permission from the council to do so from November. An Article 4 direction is already in place in some parts of the town, and the new direction will apply to the areas not already covered by this. A consultation […]

The post Article 4 direction approved in Northampton appeared first on RLA Campaigns and News Centre.

View Full Article: Article 4 direction approved in Northampton

Reform proposals could trap leaseholders in their properties…

admin    Uncategorized     agents

Leasehold reform:

Following a couple of consultations the government has published its report on leasehold reform which is indicative of the flavour of the legislation due to be enacted soon, though understandably the current health crisis my delay this indefinitely.

One of the main
options suggested in the report is the adoption of the percentage
rule, that is ground rents must not exceed 0.2% of property value, or
0.1% for new build properties. Doubling ground rents would be
acceptable provided they do not double more frequently than every 20
years and this does not continue to double beyond 125 years. Fixed
increase ground rents would not be allowed to exceed more than
double.

However, writing for
Mortgage Finance Gazette, Geraint Evans, director at Bureau
Property Consultants says that adoption of this rule would result in
“the resurrection of the mortgage prisoner,” harking back to the
credit cunch of 2008.

“The adoption of
the 0.1% ground rent rule by lenders for leasehold properties could
pave the way for a new class of mortgage prisoner, trapped in a home
they cannot sell or remortgage, says Mr Evans.

“Pointing to the
discontinuity caused by the continuous change in housing minister’s
(we are now on the 10^th minister in 10 years) Mrn Evans
thinks it’s no “wonder certain proposals are having an unruly
impact on consumers and the market.” he states.

For a long time now,
more and more developers have been incorporating increasingly higher
ground rent payments into their leases when they sold new build flats
and houses, often to unsuspecting first-time buyers who now find
themselves trapped in homes they cannot sell.

Ground rent payments
were subject to frequent reviews and increases, often doubling or
linked to inflation, so whilst this was very attractive to long-term
ground rent investors, leasehold homes became more difficult to sell
or finance.

In addition, buyers
then found that high service charges, one-off and unexpected bills,
permission charges and high enfranchisement or lease extension
charges where not unusual. This and the uncertainty surrounding the
pending reforms brought caution and uncertainty surrounding both
property leasehold and ground-rent sale valuations.

It now looks like
the government’s intentions surrounding the future of ground rents
and leasehold reform are becoming clearer. The Law Commission review
and a House of Commons Select Committee has clarified the position
somewhat on the potential legislative changes. This would include
plans to ban future leases on new build houses, a legal clamp down on
unjustified costs, provide rights for leaseholders to challenge
payments and implement regulation to review charges faced by
leaseholders and freeholders.

The government has
said it plans to create a compulsory new homes property ombudsman
service which will include a code of practice to deal with
leaseholds, service charges and mixed tenure estates.

Its not clear
whether the legislation will include existing leases retrospectively,
especially those with “onerous ground rents,” though currently
this is said to be unlikely.

Many lenders
currently have a ground rent lending policy for individual flats,
which Mr Evans’ warning is addressing. Nationwide is one of the
toughest lenders is this market, stating they will not lend where the
ground rent is more than 0.1% of the value.

The Law Commission’s
report aims to simplify the way in which premiums are calculated and
reduce these, and is amongst a number of what Mr Evans calls “very
sensible conclusions,” but, he says, there are some unworkable
suggestions that must be addressed.

“Its specific
assertion on ground rents that surpass 0.1% of the freehold value of
properties being onerous is extremely problematic for leaseholders
trying to sell their homes. Lenders are simply not approving
mortgages on such properties because of this onerous label.

“The creation of
mortgage prisoners was one of the lesser-known consequences of the
2008 financial crisis. After the crash, regulators and banks scaled
back their lending criteria, which meant those trying to get a
mortgage would be faced with tougher affordability tests,” Mr Evans
states.

“Fast forward to
today and the adoption of the 0.1% ground rent rule could pave the
way for a new class of mortgage prisoner. The report outlines that it
is “widely considered” that any ground rent which exceeds 0.1% is
“generally considered onerous”; an assumption that appears to be
based entirely on a single factor: that Nationwide Building Society
will not lend on new-build properties where the ground rent exceeds
this rate.”

2019 Government report on Leasehold Reform: the future of ground rents, service charges and selling practices

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Reform proposals could trap leaseholders in their properties… | LandlordZONE.

View Full Article: Reform proposals could trap leaseholders in their properties…

Plans to reform Wales possession process paused due to coronavirus

admin    Uncategorized     agents

The Welsh Government has announced it will pause legislation that would have seen the creation of six-month notice periods and, in effect, year-long tenancies. In a written statement, First Minister Mark Drakeford AM said the Welsh Government has had to prioritise which Bills it wants to pass the legislative process of the Senedd due the […]

The post Plans to reform Wales possession process paused due to coronavirus appeared first on RLA Campaigns and News Centre.

View Full Article: Plans to reform Wales possession process paused due to coronavirus

Coronavirus loans scheme for SME landlords beefed up after criticism

admin    Uncategorized     agents

HM Treasury’s Coronavirus Business Interruption Loans Scheme is to be offered to a much wider range of SME businesses and its lending criteria relaxed, the Chancellor has announced.

Landlords who run their portfolios as small or medium size businesses are to be given more help accessing commercial loans following an announcement by Chancellor Rishi Sunak this morning.

His recently-announced Coronavirus Business Interruption Loans Scheme (CBILS) was criticised after it transpired that the system, which offers SMEs business loans backed by the government through 40 approved lenders, was only open to businesses who aren’t normally eligible for commercial loans.

Lenders were also asking landlords for personal guarantees to back the loans, and in some cases charging very high interest rates.

In answer to this criticism, Sunak has now widened the scheme to include all SME businesses, asked lenders to charge ‘reasonable’ rates of interest and business owners will now only have to offer guarantees to cover 20% of loans under £250,000.

Interest paid

HM Treasury had already prevented lenders from insisting that company owners put up their homes to guarantee loans and instead can offer up other assets, and it will continue to cover the first twelve months of interest and fees.

The changes to CBILS will go live on Monday, 6^th April and, as before, includes loans of up to £5 million.

“We’re pleased that the Chancellor is listening and responding to the real-world concerns posed by firms across the UK who are urgently trying to access financial support,” says Adam Marshall, Director-General, British Chambers of Commerce.

Mike Cherry, Chair of the Federation of Small Businesses, says: “Taking on debt at the current time is a daunting prospect for many small businesses and the self-employed. “We look forward to continuing our constructive engagement with government to ensure that debt can be repaid in an affordable way that allows small businesses to recover from this crisis and to thrive again.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Coronavirus loans scheme for SME landlords beefed up after criticism | LandlordZONE.

View Full Article: Coronavirus loans scheme for SME landlords beefed up after criticism

Meet Mark Smith (Barrister-At-Law) Landlord tax planning strategies – Online

admin    Uncategorized     agents

Our Hon. Legal Counsel, Mark Smith, Head of Chambers at Cotswold Barristers will be presenting an overview of several landlords tax strategies at the pin Chester, Hull, Sutton (Surrey) and Watford Meetings property networking event Thursday 9th April.

The event will be held Online and Attendees can expect first class speakers and great networking opportunities.

The post Meet Mark Smith (Barrister-At-Law) Landlord tax planning strategies – Online appeared first on Property118.

View Full Article: Meet Mark Smith (Barrister-At-Law) Landlord tax planning strategies – Online

Ministers urge councils to ‘cut landlords some slack’ with selective licensing

admin    Uncategorized     agents

Guidance just out from the Ministry of Housing says councils in particular should take the crisis into account when chasing select licensing fee payments and concentrate on protecting vulnerable tenants.

Local
councils trying to implement HMO licensing schemes have been advised by the
Government to go easy on landlords.

While many authorities
have already paused inspections or consultations as they reorder priorities during
the pandemic, its advice urges them all to take individual landlords’
circumstances into account where licence fee payments may have been delayed.

The Ministry
of Housing, Communities and Local Government’s guidance – ‘COVID-19
(Coronavirus) and the enforcement of standards in rented properties’ –
tells councils that for mandatory HMO licensing and non-mandatory schemes
(selective licensing and additional HMO licensing) already in place, landlords waiting
for licences should be contacted to explain potential delays.

It advises: “Take
individual landlords’ circumstances into account where licence fee payments may
have been delayed due to the current situation.

“Prioritise
high-risk licensable properties if this is necessary to protect vulnerable
tenants and target imminent risks to health.”

Councils
should continue as usual for non-mandatory licensing schemes which are already
in place but, it adds: “As with all enforcement, take a pragmatic and
common-sense approach to enforcement action”.

And in areas
where they’re in the process of introducing non-mandatory licensing schemes, councils
should consider pausing them at an appropriate point, “in line with the advice
on proactive and reactive work”.

Chris Norris, policy director for the National Residential
Landlords Association, tell LandlordZONE that council resources should be
focused on supporting and protecting the most vulnerable.

“Licensing schemes are not essential and we welcome the Government
guidance that councils should pause schemes that are not yet in force,” he
says.

“We call on local authorities to commit to following this in a
spirit of pragmatism and partnership with landlords.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Ministers urge councils to ‘cut landlords some slack’ with selective licensing | LandlordZONE.

View Full Article: Ministers urge councils to ‘cut landlords some slack’ with selective licensing

BREAKING: Petition with 102,000 signature calls for all rent to be suspended

admin    Uncategorized     agents

One of the UK’s largest tenants’ unions, which is behind the petition, has written to Boris Johnson calling for all rent payments to cease in order to protect tenants during the crisis.

Unsympathetic landlords are putting pressure on renters to take unnecessary risks by going to work during the crisis, according to campaign group the London Renters Union.

It’s calling on the government to suspend all
rent payments – and to protect people from having to pay big arrears when the pandemic
has eased.

The group has gathered more than 102,000
signatures on an online petition urging Boris Johnson to protect renters and
has written to Housing Secretary Robert Jenrick calling on him to suspend all
rent payments, make the evictions ban permanent,
introduce rent controls, and give councils the power to repossess empty homes.

The letter from organiser Amina Gichinga warns that the UK faces a rent debt and evictions crisis.

Leave the house

She says: “Because of the pressure to continue to pay rent, many thousands of people are forced to leave the house to work. Despite the Government giving mortgage holidays to landlords and urging ‘compassion’ many agents and landlords are still telling renters that rent is due in full and that we will be evicted if we don’t comply.”

The union
believes renters should be freed from having to make any rent payments during
the Coronavirus pandemic and that they should be protected from falling into
debt.

She adds: “Legislation
should be introduced that suspends rent payments for the duration of the
emergency and waives rent debt…and Section 8 eviction notices should be
suspended for the next 12 months.

“Such measures
would significantly increase the ability of renters to follow government health
advice to stay at home and would help prevent a rent debt and evictions crisis.”

It has set up the hashtag #suspendrent on Twitter to gather support.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – BREAKING: Petition with 102,000 signature calls for all rent to be suspended | LandlordZONE.

View Full Article: BREAKING: Petition with 102,000 signature calls for all rent to be suspended

Blackstone catches a cold in Spain…

admin    Uncategorized     agents

Rent holidays:

Private equity fund
Blackstone, said to be the world’s biggest private landlord, is in
for some pain in Spain as the coronavirus effect falls out.

Along side other
private equity groups, including Bain Capital and Cerberus Capital
Management, they have poured tens of billions of their investor’s
cash into European property markets, including the UK and Spain.

Now it seems the
Spanish government in Madrid is singling them out, along with other
investment fund landlords, by slapping on them a decree which will
force on them into some heavy losses with their large private sector
residential property portfolios.

The funds’
investment in rapidly growing large-scale rental units seemed a no
brainer at the time, creating one of Europe’s hottest property
plays; now the move may seem not quite so smart.

Spain’s Deputy
Prime Minister, Pablo Iglesias, leader of the hard left Unidas
Podemos party, is said to have specifically singled out investment
funds, owners of rental units. They will be chief among those to take
either a 50% haircut on rent arrears, or to “cut a deal” with
vulnerable tenants so as to re-schedule rent payments over three
years.

As one of Spain’s
biggest landlords with some 15,000 multifamily rental units, any
plans Blackstone had of making up its losses through higher rents
elsewhere could come to an abrupt end. The Spanish government says
that tenants coming to the end of their contracts will automatically
be granted a six month extension, with no increase in rent, and with
no rent increase.

By contrast,
Blackstone’s European Logistics investment strategy appears to be
paying off in the coronavirus era, with home deliveries at a premium.
They have recently capitalised on the continued e‑commerce
tailwinds and strong logistics fundamentals in Europe by assembling a
large logistics portfolio along key strategic distribution corridors.

Their portfolio is
comprised of high-quality assets located in major logistics hubs in
countries such as Germany, France, the UK and Spain. This commercial
property portfolio, they claim, benefits from “robust tenant
demand” as continued e-commerce growth has driven an increased need
for well‑located warehouses across Europe.

In the UK Blackstone
recently bought-out listed industrial property company Hansteen
Holdings plc for an estimated £500m (€588m), to be added to its
recently launched European last-mile logistics company, Mileway.

James Seppala, head
of Blackstone Real Estate Europe, said:

“This (Hansteen)
transaction is a compelling opportunity to expand our pan-European
last-mile logistics real estate company Mileway in the UK, and it is
testament to our long-term belief in investing in the country.”

In 2019 Blackstone
acquired The Arch Company (formerly known as Network Rail Property),
a high-quality portfolio of primarily infill railway arches
concentrated in Central London and around key transport hubs.

The portfolio it
purchased is quite unique in character, comprised of over 5,200
rental units with diverse uses, including last mile logistics and
storage, retail, food and beverage, office and leisure.

The new company says
it is “committed to improving tenant experiences and providing
attractive spaces for local businesses to grow,” thus it intends to
contribute to long-term growth and revitalisation of local
communities.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Blackstone catches a cold in Spain… | LandlordZONE.

View Full Article: Blackstone catches a cold in Spain…

Rent stopped? Here’s how to help a tenant access Universal Credit

admin    Uncategorized     agents

Good tenants don’t become bad tenants overnight and, where the cause of their delay or failure to pay rent is a genuine lack of cash, landlords should help them access the Universal Credit system. Here’s a handy guide from expert Bill Irvine.

The Chancellor’s recently announced economic measures will take some time to fully implement and, in the meantime, people need to find some sources of advice and financial help.

I don’t expect landlords to fulfil that role or try to be benefit experts. The good news is that you’ll find there are various central and local governmental bodies that can provide help, including:

1. Coronavirus General site
2. Statutory Sick Pay 
3. “New Style” Job Seekers Allowance (based on NI contributions)
4. Universal Credit, including assistance with rent and advance payments
5. Housing Benefit – try your local council and ask about Local Housing Allowance
6. Council Tax Reduction – again, your local council.

In addition, to Citizens Advice, you’ll find there are many Welfare Rights, Money Advice, Debt Advice, Financial Inclusion services provided by Housing Associations, Voluntary organisation and Church groups. Services are usually of a very high standard and free to users.

If you’re looking for not only advice but help with form filling, querying and pursuing things with DWP or Councils, try calling your local CAB and they’ll point you in the right direction. Otherwise, simply Google “benefits advice” and post code.

Universal Credit & Advance Payments

Universal Credit will become
the most critically important benefit for all those low paid, or part-time or
self-employed workers who are forced to self-isolate for weeks or months or for
those who have their hours reduced or are laid off and who can’t access funds
quickly.

Other benefits like Statutory
Sick Pay (SSP), JSA & ESA (Contribution based) will play a part as well,
but none of these provide enough sums to cover rental costs in all new claims.

UC can be claimed, quite
simply, online, which is a real bonus, when claimants can’t possibly attend
Jobcentres. I foresee, DWP making the online claim enough to make an award,
without many of the usual conditions of entitlement (e.g. Claimant Commitment,
which would normally involve a face-to-face meeting or seeking jobs on internet).

If DWP wishes to confirm the
rental costs, it can email or write to you, as landlord, to certify the rental
charge and size of accommodation and/or allow the tenant to upload the
information on their online journal.

It could also agree to relax
the usual Tier 1 factors (safeguarding the rent) by paying you the “housing
costs” to avoid rental loss, arrears and threats of eviction. That’s
something that would greatly assist both tenant & landlord and can be
achieved by a simple instruction to DWP staff to carry this out without the
need for new legislation.

The Government & NRLA have
underlined the importance of engaging and trying to assist your tenants and
being realistic in your expectations. If you do that, you’re more likely to
succeed in protecting both your own and your tenants’ interests. Pre-action
protocols also expect you to assist your tenant access these various forms of
help, before acting to pursue recovery of the debt & property.

Making a UC
claim – first step in the process –
https://www.universal-credit.service.gov.uk/postcode-checker

Plus, some of the latest
information and advice about how to secure “payment direct” or
“Managed Payment to Landlord” as DWP refers to it.

1. New APA procedure https://directpayment.universal-credit.service.gov.uk/
2. Direct Payments of housing costs or Alternative Payment Arrangements (APAs) see below
3. https://www.gov.uk/government/publications/universal-credit-alternative-payment-arrangements/alternative-payment-arrangements#annex-a-factors-to-consider-for-alternative-payment-arrangements   
4. Recommended paragraph to include when submitting UC 47 (Non-secure) application to receive payment direct.

“Please find attached an
application for an Alternative Payment Arrangements, based on Tier 1 criteria,
including the necessary supporting evidence. Please ensure that payment of the
“housing costs” element of the UC award is suspended immediately and
remains so until a decision is made on the merits of this application, as this
would ensure public funds are not misused. This request is based on Regulations
44 (2) (ii) & 58 (1) of the Universal Credit (Claims & Payments)
Regulations, 2013.

1. DWP’s Advice to Decision Maker’s Guide A4320 confirms the ability to suspend the “housing costs element” in this way”.
2. You can chase up APA requests by contacting your tenant’s Case Manager at a dedicated line 0800 328 5644
3. If that doesn’t produce the desired result, make a 1st stage complaint to your local DWP District Manager. See my members’ bulletin http://universalcreditadvice.com/housing-associations/2016/09/universal-credit—your-regional-complaint-resolution-teams-explained

Look out, for updates as well
from the NRLA (RLA) website https://www.rla.org.uk as it has very strong links with DWP, including
Ministers.

For more info contact Bill Irvin UC Advice & Advocacy Ltd www.ucadvice.co.uk Tel: 07733 080 389

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Rent stopped? Here’s how to help a tenant access Universal Credit | LandlordZONE.

View Full Article: Rent stopped? Here’s how to help a tenant access Universal Credit

Landlords need to understand Universal Credit as tenants sign on

admin    Uncategorized     agents

As The Department for Work and Pensions (DWP) grapples with nearly one million new claimants applying for Universal Credit following the outbreak of COVID-19, Caridon Landlord Solutions, part of Caridon Group, says landlords should educate themselves on the Universal Credit system now so that they can support their tenants and both mitigate the risk of rental arrears.

The post Landlords need to understand Universal Credit as tenants sign on appeared first on Property118.

View Full Article: Landlords need to understand Universal Credit as tenants sign on