Student rental market ‘fundamentals’ remain despite rent strikes and closed campuses, it is claimed

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Property giant Cushman & Wakefield admits student rental market faces huge challenges at the moment but says it still offers a long-term investment opportunity.

Global
property agent Cushman & Wakefield is bullish about the UK’s student
accommodation sector, despite gloomy predictions for the next academic year.

It’s just completed deals on two student accommodation blocks in Leicester and Edinburgh for £22 million; Dover Street in Leicester has 135 bed spaces while Goods Corner in Edinburgh (pictured) has 108 studio bed spaces. It says both properties have been 100% let with strong bookings for the 2020/21 academic year.

However, London Economics research suggests that more
than 230,000 fewer students will enter higher education as a result of the
crisis, over half of which are international students.

That fall in student numbers would translate into a drop in income of around £1.51bn from non-EU students, £350m from EU students and £612m from UK students opting to stay away.

Lost revenue

Universities UK, the representative organisation for
the UK’s universities, has also reported that institutions will suffer an
estimated £790m in lost revenue in the 2019/20 academic year. Cushman &
Wakefield’s student accommodation advisory team says about 44% of this figure was
due to accommodation rebates.

Russell Hefferan, partner in Cushman & Wakefield’s student accommodation capital markets team, says: “Whilst in the immediate term COVID-19 presents obvious challenges for the industry, this transaction provides an excellent example of the strong, long-term fundamentals student accommodation offers.

“Overall,
in the UK there is a healthy amount of student applications, with overseas numbers
ahead of 2019 according to UCAS. From 2021 there is also going to be a
continued increase in the number of UK 18 year olds coming through the system.
The demand and supply dynamics remain positive for the sector and it is in good
shape to weather the storm.”

Homes for Students will manage and operate both blocks.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Student rental market ‘fundamentals’ remain despite rent strikes and closed campuses, it is claimed | LandlordZONE.

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London mayor launches initiative to tackle illegal evictions, rental scams and sub-tenancies

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Sadiq Khan says he wants to help local trading standards officers and the police spot, deal with and report unethical and illegal activity by landlords in London.

Mayor of London Sadiq Khan has vowed to get tough on both rogue and unethical landlords by rolling out a training programme for local authorities and the police.

He’s now promoting courses for council housing and trading standards teams in how to deal with unlawful behaviour by rogue landlords including rent-to-rent scams, sub-tenancies, harassment and illegal evictions.

The Mayor’s team is also working with the Metropolitan Police to help officers better respond to illegal eviction calls; they can use his ‘Report a Rogue Landlord or Agent’ tool to log incidents they attend so that council teams can follow up with the tenant and start enforcement action if needed.

Homelessness

Khan believes many of London’s
private renters are facing imminent homelessness unless the Government provides
more support and acts now to properly protect them from eviction when the ban
is lifted.

He says some unscrupulous landlords
and letting agents are even ignoring the ban and threatening renters with eviction.

“Many
renters are just one pay cheque away from homelessness,” he says. “It’s
completely unacceptable that London renters should be facing a ticking timebomb
where they could lose their home.

“Suggestions that
landlords and their tenants agree ‘affordable repayment plans’ between
themselves is totally unfair, and unrealistic in many cases.” 

In April Khan set out his proposal for a ‘Triple Lock’ protection for renters, calling on the Government to increase welfare support for renters, make section 8 discretionary in court proceedings and scrap section 21 evictions.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – London mayor launches initiative to tackle illegal evictions, rental scams and sub-tenancies | LandlordZONE.

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Aldermore resumes physical BTL valuations in England

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Aldermore Bank is resuming physical mortgage valuations on rental properties for Buy to Let purchase and remortgage in England.

Strict social distancing and safety measures will be met in line with Government guidance released on 10 May. Aldermore will ensure a detailed risk assessment is undertaken ahead of a valuation appointment so that the safety of residents and surveyors is prioritised.

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DWP apologises to landlord over ‘service failures’ but takes TWO years to investigate case

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Mick Roberts says difficulties of arranging an Alternative Payment Arrangement and the time it took to investigate his case are ‘disgusting’ and a key reason why landlords are increasingly reluctant to take on Universal Credit tenants.

A landlord in Nottingham has received a rare apology from the Department of Work and Pensions (DWP) over problems he encountered while attempting to register an Alternative Payment Arrangement (APA) for one of his tenants.

Mick Roberts, who operates one of the largest private property portfolios in Nottingham, has told LandlordZONE that although he’s pleased a DWP Independent Case Examiner (ICE) found in his favour, he is furious that it’s taken two years to be delivered.

In summary, the ICE found that the DWP’s dealings with Roberts included providing contradictory information, dealing poorly with his complaints and causing a considerable delay in implementing his request for an APA for his tenant, who lives in the Rise Park area north of the city centre.

“It is clear after reading the report that you have not received the level of service you should expect from the UC team. Please accept our sincere apologies,” a DWP spokesperson said.

Direct payments

Roberts complained in March 2018 after the DWP failed to tell him that his UC47 form was incomplete, or to explain that – because his tenant had earned some money during the ensuing months – this would impact his UC direct payments.

The application subsequently stalled and the tenant fell into rent arrears, a situation that Robert claims was wholly caused by the UC credit system. He also complained that there were no such problems with the old Housing Benefit system.

These complaints were rejected in July 2018 and it is now taken two years for the DWP to find in Roberts’ favour.

“While a landlord has no rent coming in takes an ICE two, yes TWO years to look at the complaint.

“It’s disgusting. We need change and it’s one reason why landlords are reluctant to take on tenants in receipt of UC.

“We could solve half of the homeless problem in Britain if the DWP just paid the landlord the rent directly.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – DWP apologises to landlord over ‘service failures’ but takes TWO years to investigate case | LandlordZONE.

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Coronavirus: Councils delay introduction of licensing schemes

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Several local authorities have delayed the introduction of licensing schemes, during the current coronavirus pandemic. Earlier this year, Wirral Council confirmed that some areas of Birkenhead and Seacombe would be subject to selective licensing from 1st July 2020. On 13th May, Wirral Council confirmed that the scheme will now not come into force until 1st […]

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Blue-blooded landlord reveals why her tenants are paying their rent on time during pandemic

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Castle-inhabiting entrepreneur and 300-property landlord Emma Manners, the Duchess of Rutland, gives away some of her portfolio management secrets.

While many landlords are relying on a
mortgage holiday to keep afloat as their tenants struggle financially, one of
the country’s high-profile property owners has told a national newspaper that
all of her 300 tenants have paid up on time during the crisis.

The Duchess of Rutland, Emma
Manners (pictured), runs her property empire from Belvoir Castle in
Leicestershire, renting out houses and cottages in towns and villages around
the estate, as well as in neighbouring Lincolnshire and Nottinghamshire.

Her stately pile has
appeared in TV series including The Crown and its owner recently promoted her
own branded gin.

Manners has told The Daily Telegraph that her lack of money worries is due to extremely loyal tenants – some of whom have been renting from her family for 50 or 60 years.

While the noblewoman had worried that Covid-19 might impact their finances, she’s yet to experience a single late payment compared to a 10-20% rates in the wider market.

Vetting procedures

Her comprehensive vetting
procedure, conducting interviews herself rather than relying on others to
choose tenants on her behalf, is another positive says Manners.

“I interview all the
tenants and find out where they’re from and about their lives. We try to make a
community, such as inviting them to harvest festival and carol services every
year. We’re an extended family.”

Keeping existing tenants
happy has also helped her avoid costly void periods without a rental income. 

She says: “When you have a
portfolio of properties it’s always about the down time between tenants, so we
always look for people who want to be here for the long term and want to
settle. I don’t like the churn, that’s my key rule.”

That churn can be reduced
by continued investment in properties, and not raising prices to the point
stable tenants choose to look elsewhere, she helpfully advises.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Blue-blooded landlord reveals why her tenants are paying their rent on time during pandemic | LandlordZONE.

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Belvoir survey reveals decrease in COVID-19 related rent arrears

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A second survey of new COVID-19 related rental arrears conducted by Belvoir, the UK’s largest High Street property franchise, reveals that less than 5% of tenants across all four brands are in arrears. This compares to pre-lockdown arrears of 2%

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Mary Latham: how to survive the Coronavirus-troubled student rental market

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The high profile industry trainer and long-time landlord reveals how the student rental market has changed and what landlords can do to get through these strange times.

“In 2018-19, of the full-time and sandwich
students studying in the UK, only 19.4 per cent of undergraduates and 15.5 per
cent of postgraduates lived in provider-maintained property, or in student
halls owned by a university or college. At least 29% lived in accommodation
rented from smaller private landlords” Source Officeforstudents.org.uk

The student letting
market is a micro market within the private rented sector, unlike any other
tenant group, and you either love them or hate them but it cannot be denied
that students are a significant part of demand for private rented
accommodation.

 I love them and I do my best to keep them safe
(often saving them from themselves) and happy while they enjoy a time of their
lives which probably won’t ever come again.

Covid19 has caused me stop and re-think a routine with which I have been
familiar for almost 50 years.  My concern
is that some landlords haven’t got the information or experience to understand
the issues which are not immediately obvious. I am writing this for those
landlords in the hope of helping them to avoid making expensive mistakes at a
time when you don’t need any further stress.

Legal Considerations

Possession:

Possession
means that the property is in your control it doesn’t mean, as some people
think, that you own the property.

• We give
  the keys to a new tenant – that tenant now has legal possession. Even
  when he doesn’t pay the agreed rent, even when there is no signed contract,
  even when a signed contract has come to the end of the fixed term.
• How do we
  regain possession – there are ONLY two ways

1. The tenant surrenders the tenancy and
returns the keys to the vacant property

2. Enforcement of a Court Order, either when
the tenant leaves voluntarily on the date the Judge decrees or when a Bailiff
enforces the Court Order and gives you back possession.

• When is it
  illegal to take possession – When
  the tenant doesn’t want to leave, even when the end of the fixed term has
  arrived or the date decreed by the Court Order. Landlords cannot enforce a
  Court Order, force a tenant to leave for any reason whatsoever, move contractors
  or new tenants in while the property is occupied by even one of the original
  tenants.  NB.

The purpose of this
article is to protect the many landlords who only let to students and who are
used to the annual migration from one property to another on 1^st
July or thereabout. Those landlords who need to read this have no experience of
having a group of tenants who are on the doorstep with their worldly goods,
waiting for access only to find that the previous tenants haven’t moved out nor
do they intend to at that time

Those of us who let
to non-students know that it is risky to re-let a property until we are certain
that we will have vacant possession from the previous tenant and we certainly
wouldn’t allow new tenants to rock up until we had checked that the previous
tenants had moved out, carried out an inspection and collected the keys.

This is however
quite common in the student market where it’s not unusual for the outgoing
group to be passing the incoming tenants in the hall.  It’s often chaotic and stressful but it’s all
part of the charm of letting to students. Ask any cleaner who has been on her
hands and knees while people are moving both in and out. Often landlords get a
kick in the pants when they need to go through the arbitration process of the
deposit protection scheme and they have no check in or out inventory.

All well
and good but not this year!

This is the year where the cycle was broken in the student community.  No viewings for weeks, some members of the group gone home, some stuck abroad and some still living in a rented property but with no property in which to move. Then there are those who did sign a contract for a new property but are now stuck with people dropping out of the group and the fear of being responsible for the rent for the whole house because they all signed a joint tenancy with deposits and guarantors.

What does
this mean for landlords?

We need to learn and act quickly.

First a word to those who are thinking “I’ve got signed contracts and they are responsible for the rent for
the year whether they move in or not” Good luck getting a judge to award
you 12 months rent. Google force majeure
and you will see why.

Some words of advice from Paul Shamplina of Landlord Action:

“I’ve had numerous calls from Student landlords affected by this pandemic and the fear that students will not move in to their properties as Universities are closed.  I had one agent who had 30 students refusing to pay their rent on the advice of their University. 

If landlords have pre contracts signed, but not executed with tenants refusing to move in, I think open lines of communication , practicality and common sense has to prevail, mediate. The Government have made it clear that students have to pay their rent and of course they will have their parents as guarantors.  If a student refuses to move in, the landlord cannot afford that property lying empty for the term of the tenancy and risk trying to pursue the student for unpaid rent through the courts,  who knows if a judge deems this contract broken under terms of Force Majeure.   I know some landlords are now looking to convert HMOS back into family homes so they can let ASAP. This pandemic has caused crisis especially in the student rental market.”

Government guidelines

We need to manage
the situation carefully, following government guidelines for viewings and for
moving home.  These are for England

http://www.legislation.gov.uk/uksi/2020/500/contents/made

The Scottish
Government have said that they plan to allow the property market to reopen on
18^th June.

Up dates from Welsh
Government

https://gov.wales/staying-home-and-away-others-guidance

Up dates for
Northern Ireland

https://www.communities-ni.gov.uk/landing-pages/covid-19-housing

Plan of action

Contact
each individual existing tenant and ask:

• Are
  they and their families well?
• Are
  they still in your property? If not have they moved out completely?  If they are still there, what are their plans
  for the end of the tenancy?

This will tell you
where you stand.

Some of them will have returned home but
without all of their belongings, if this is the case you need to ask whether they have a new property
to move into for next year.  The answer
will open a discussion about when they intend to move out. We may need to take
a hit on the cleaning bill this year (the tenant fees ban prohibits us charging
for this) or we can reclaim from their deposit – probably not a great idea and
if you get vacant possession on the last day of the tenancy be grateful and
move on.

Some of them will tell you that they have
already moved out lock stock and barrel don’t be tempted to ask for the keys to be returned early unless they
offer, unless you want to give them a rent refund but make it easy for them to
return them to you before they come back to move into a new property – offer to
pay for the postage

Some of them will be in the property, often
alone and unable to return home or without family support in the UK; a problem and an opportunity.  Send them a pizza and ask if they need any
help either now or at the end of the contract. It’s worth transporting their
belongings to another student house to get your own back with vacant
possession.

If you have tenants
who are still in the property and who have nowhere to move to this could be an
opportunity to fill a room where one person has dropped out of the group or
find another landlord with an empty room, make his day and enable your tenant
to give you your property back without pressure.

If you end up with a tenant who won’t move out you need to go through a lengthy Possession Process under Section  21 of the Housing Act 1988.

Whatever happens DO NOT ASK OR TELL THE TENANT TO MOVE OUT… THIS IS AN ILLEGAL EVICTION AND CARRIES VERY HEAVY PENALTIES INCLUDING LOSING YOUR “FIT AND PROPERTY PERSON” STATUS WHICH PREVENTS YOU BEING THE LICENCEE OF AN HMO.

Find a landlord with an empty property and
organise a viewing or virtual viewing for the students who cannot now move into
your property.  Otherwise you will face a
claim for Breach of Contract on top of everything else.

Letting the property

If you’ve got empty properties or rooms:

Do not waste time
arguing with students or guarantors, don’t count the cost, communicate with
your existing and new students and offer them money if they let a room for you.
Post on Face Book Groups and any online letting sites. Contact local landlords,
local letting agents and anyone in the university who may want to help to make
this less painful than it needs to be.

Remember if you
can’t get a group of students there are other groups who might like to live in
a lively young area just be careful not to let to a family if your property is
in an Article 4 Area because you will lose your Established Use as an HMO

There will be some
students who were due to go abroad for next year and others who were due to go
on placement, many of them will return to their university, even where much of
the learning is online and they will need accommodation, this may go on
throughout the summer stick with it.

How online learning
will impact on the student market it a discussion for another day.

Remember to continue to protect yourselves,
your contractors and your tenants. I wish you luck at this stressful time.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Mary Latham: how to survive the Coronavirus-troubled student rental market | LandlordZONE.

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Ambiguous CMA guidance over student lets

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The Government’s Competition and Markets Authority (CMA) has told Landlordzone that its recent pandemic emergency guidance could cover students lets where public health instructions under lockdown have precluded the use of rental property.

The Coronavirus (COVID-19) pandemic

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