Browsing all articles from July, 2020
Jul
22

Shelter challenged over ‘wrong’ assumption that landlords discriminate against DSS tenants

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A possession company boss has challenged Shelter for judging landlords following the recent no-DSS court ruling that prevents them from renting to housing benefit claimants.

Following the appearance of its chief executive Polly Neate on Radio 4’s Woman’s Hour earlier this week, Chris Daniel, director of possession company Possession Friend, says the homeless charity is wrong to suggest landlords are reluctant to rent due to stigma around claimants.

On the programme, Neate told listeners: “Landlords might think that people on housing benefit are much less likely to pay their rent – they think it’s going to damage their pockets, but it’s not. I don’t think the image of people on benefits, the stigma, helps – that’s why we feel passionate.”

However, Daniel says there are a number of reasons why many landlords have actively diverted away from considering tenants on benefits.

“The point the programme host made about direct payment to landlords being deliberately removed under Universal Credit plays a massively important role,” he says.

“If payments have been going direct to a landlord, and it’s discovered that the claimant was for a period not entitled to state benefit (perhaps working while not disclosing – something the landlord would be unaware of) Universal Credit will immediately demand repayment by the landlord.”

Daniel tells LandlordZONE: “Lots of rented properties are inherited by landlords who themselves are on the minimum wage or are key workers. Such people cannot afford to sustain a year’s worth of rent claimed back in the form of benefit or Universal Credit. Neither can they afford to wait for the best part of a year it takes to evict a rent-defaulting or otherwise bad tenant.”

Adds Daniel: “There are people scamming landlords – it would be an idea to create a rogue tenants’ database so the courts know who keeps being evicted.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Shelter challenged over ‘wrong’ assumption that landlords discriminate against DSS tenants | LandlordZONE.

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Jul
22

LATEST: Slick virtual reality smartphone game for property investors launches with a million players

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A virtual reality property investment game called Landlord Go has officially launched today in the UK following four years of development and is so addictive that a million people have already signed up to play during its pre-launch phase, it is claimed.

Available on both Android and Apple smartphones, the game is being launched via a slick marketing campaign, and enables property investors and landlords to have a go at building a virtual property portfolio of both real commercial and residential properties without having to risk their real-world cash.

The game can be played globally, but its UK representative tells LandlordZONE it will have local interest for players because many landmarks in their area from corner shops to apartment towers have already been mapped and therefore can be ‘bought and sold’.

The game has been developed by London-based Reality Games, and enables players to buy, sell, and collect rent on local famous buildings and landmarks.

Property empire

Players start small but with skill can quickly amass a real estate empire through investing, it is claimed, by engaging in bidding wars with other players, recreating the experience of competing in the high-stakes real estate market, all via their smartphone.

The game also enables players to stand in real places and then use their phone’s GPS position to see a ‘gaming version’ of the buildings around them including values and who owns them, as well as the personal wealth of other players nearby.

Landlord Go has used NASA data to divide the world up into 10 billion plots and its developer says that once it has enough players and property valuation data, it will eventually linked to the real world of newbuild development.

“The level of realism is what sets Landlord Go apart,” the promotional material for the game says. “For the Buildings in the game have the correct simulated height that correspond with the real world versions, with image recognition and location data available through the AI camera feed.”

Watch the YouTube trailer.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Slick virtual reality smartphone game for property investors launches with a million players | LandlordZONE.

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Jul
22

Dilemma – Rent to Rent/Company Lease contract basics?

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I am looking to possibly move to another Agent in regard to a Rent to Rent/Company Lease arrangement for one of my properties.

I’m not happy with the current company at all – dire call back response, never reply to emails etc among other things.

The post Dilemma – Rent to Rent/Company Lease contract basics? appeared first on Property118.

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Jul
22

Is guarantor still liable for arrears if I allocate UC against current rent?

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I have a tenant who has not paid any rent since late 2019. I obtained a possession order just before lockdown and was in the process of instructing county court bailiffs when Covid-19 caused everything to grind to a halt.

The post Is guarantor still liable for arrears if I allocate UC against current rent? appeared first on Property118.

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Jul
22

More commercial landlords moving towards turnover rents

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Covid-19, is just the latest crisis to hit retailers battling on against reduced foot-fall in many regional towns. The effects of Covid have hit the sector hard, particularly with many high streets and shopping centres turning into ghost towns.

While some of the more adaptable retailers are making ends meet using online channels, the majority are still burdened by crippling rents and overhead costs on closed shops and empty outlets.

It’s a perfect storm of one problem after another to hit the retail sector which has raised the prospect of a major change in the way the commercial landlord / tenant relationship works in the UK. One issue that has been discussed many times and now comes to the fore is the idea of turnover rents.

Turnover rents would mean that commercial landlords are asked to share some of the burden, take on some of the risk associated with running a retail operation. Traditionally, once the lease is signed, commercial landlords share none of the tenant’s business risk, and with a full repairing and insuring lease they have a guaranteed clear return on their investment, come what may.

The idea of a turnover rent therefore introduces a whole new dimension to investing in commercial property, and remember, many of the big investors in field are insurance and pension companies who very much rely on the security of their investment return.

Will turnover rents become the ‘the new normal’ for both the high street and shopping centres alike after Covid? If so landlords will need to learn to grapple with the added complexity and risk of such an arrangement. New leases along these lines may be helpful to retailers but they are not without their problems for both landlords and tenants.

Having both parties share in the good and bad times means dividing the payment into a fixed term base rent, determined by current market conditions, and a turnover element, determined by the tenant’s sales performance. Typically, a base rent will be around 75-80 percent of the total.

There inevitably ensues a tough negotiation as to these proportions of base rent to turnover element, and then further issues ensure: access to accounts and fraud prevention, what about sales returns, often quite high especially with online clothes sales, are online sales even included, staff sales at cost, what about unpaid accounts and bad debts on credit sales, length of the agreement, the list goes on.

Disputes on turnover figures become time consuming and expensive. Landlords will want more access inside the business if trust is to be maintained. Full audits may need to be undertaken periodically, inspecting and querying all business records which needs up-to-date and organised accounting systems, cash receipts, online sales data, VAT returns etc. All this ads costs and accountants will love it!

One Bolton-based landlord, Millfield Estates, as reported by thebusinessdesk.com, is “biting the bullet” on turnover-rents, announcing plans to offer a new ‘turnover rent’ policy at two of the largest properties in its portfolio

The company is “applying a more flexible approach to its property lettings post-lockdown.” Its new ‘turnover rent’ offer will come into force at its Nottingham and London retail properties with immediate effect.

“With the COVID-19 pandemic exacerbating a situation in which there is now an imbalance in risk between landlord and tenant, leaving many locations no longer viable from a trading perspective, Millfield Estates’ fresh approach to rent at two of its largest properties is one that will give prospective tenants more confidence in an uncertain future,” the company says.

Millfield says its new policy offers rent as a percentage of the turnover of the occupying tenant, and is aimed at bringing life back to the high street, with a real emphasis on flexibility for its tenants, and “with no fixed parameters put in place when entering into negotiations.”

Paul Dobson, property director for Millfield Estates, had said:

“We are living in unprecedented times and it is crucial that, as a company, we remain fleet of foot to evolve and implement initiatives that will instil confidence in our properties and show tenants, both new and existing, that we have their best interests at heart in this fast-changing world.

“Our flexible and bespoke approach to our letting offers at Lister Gate (Nottingham) and South Molton Street (London) demonstrates our commitment to a closer landlord and tenant relationship, which in times of crisis such as now, can only help both sides.

“We believe our rent policies go some way in mitigating risk for our retail tenants, promotes a fairer way of doing things, and provides a welcome boost to the sector during this difficult trading period.”

Located in one of London’s most fashionable and well-established retail districts, 49 and 50 South Molton Street in Mayfair comprises two late-19th century period buildings of 4,954 sq ft in total, offering an A1 retail unit on the ground floor and three upper floors dedicated to B1 office space.

Enjoying a prime location just 500-yards away from the Intu Broadmarsh Shopping Centre, 28-30 Lister Gate offers 4,871 sq ft of A1 retail and ancillary accommodation, with the property benefiting from a catchment population in excess of one million.

Millfield Estates is represented by letting agents GCW (Lister Gate) and JLL (South Molton Street) who played an active role in setting up this new rent policy.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – More commercial landlords moving towards turnover rents | LandlordZONE.

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Jul
22

144 days to sell a house in 2020

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The latest research by GetAgent.co.uk, has revealed that so far this year, the time it takes to sell a property has increased by 14% when compared to last year. With an average time of 144 days or nearly five months

The post 144 days to sell a house in 2020 appeared first on Property118.

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Jul
22

Electrical Safety Certificate Costs?

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I have properties in and around London and the Electrical Safety Certificate costs vary wildly.

None of the London properties has needed a certificate until now. I have had a quote for £340 for a 2-bed flat in London.

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Jul
22

My email to Woman’s Hour regarding Shelter response to no DSS

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I have recently sent my email below responding to Shelter’s Polly Neate’s response as to why she thought landlords do not want to rent to tenants in receipt of benefits.

To: womanshour.yourviews@bbc.co.uk

Re – 

The post My email to Woman’s Hour regarding Shelter response to no DSS appeared first on Property118.

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Jul
21

GET READY: New possession hearing rules WILL add time and cost to existing evictions as ban end looms

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Evictions expert Paul Shamplina of Landlord Action has urged landlords waiting to re-start possession actions over non-payment of rent dating from before the pandemic to get their paperwork ready now to comply with the new court rules revealed on Friday.

These require that, in order to proceed with existing actions, landlords must inform both the court and their tenant that they wish to resume their claim by serving a ‘reactivation notice’.

Landlord Action has approximately 500 cases ‘stayed’ in the system and is ensuring its clients have their reactivation notices served to the courts as soon as possible once they re-open, although there are believed to be 5,700 such cases in the system in total.

Reactivation notices are part of several rule changes laid before parliament on Friday within the Civil Procedure (Amendment No. 4) (Coronavirus) Rules 2020 that add a ‘Covid temporary provision’ to existing regulations.

“The reason behind this is to ensure the court’s time is used effectively and on the right cases after hearing begin on 24th August,” says Paul Offley, the Guild of Property Professionals’ Compliance Officer.

“If the matter has been resolved through another means, the case can be withdrawn, something the government is encouraging landlords to do rather than pursuing non-priority cases through the courts.”

As well as reactivation notices, landlords must provide a court with relevant details regarding the tenant’s circumstances. This must include the effect of the pandemic on the tenant and his or her dependants, so that the court can consider vulnerability, disability, social security position and those who are shielding.

Landlords must also provide a list of the full arrears history before the hearing.

Block listings

Although these rules are reasonable on the face of it, the realities of both social distancing in courts, which mean they will no longer be able to offer the usual ‘block listings’, and the extra time all this paperwork will add to the process, mean many landlords face additional time and expense before they can regain possession.

“Many will struggle to find out what their tenant’s current situation because the relationship has totally broken down and that’s why it’s ended up in court,” says Shamplina.

“These new processes will therefore be hard for landlords to implement, and of course the landlord cannot harass the tenant to get the information if they are unforthcoming.

“Unfortunately for many landlords who have already been waiting for months to regain possession before the pandemic it will be pot luck – some courts will have huge backlogs while others will not.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – GET READY: New possession hearing rules WILL add time and cost to existing evictions as ban end looms | LandlordZONE.

View Full Article: GET READY: New possession hearing rules WILL add time and cost to existing evictions as ban end looms

Jul
21

SPOTLIGHT: Why have so many landlords been remortgaging during Covid?

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Landlords raising capital – to either act as a buffer from the impact of COVID or to invest in more property – pushed up the level of buy-to-let re-mortgage business in the second quarter of the year.

Research by Paragon Bank found that the ability to secure a better interest rate was the most common reason for re-mortgaging for 54% of landlords, while 30% re-mortgaged to raise capital.

This made it the second most popular reason, accounting for double the amount of business than all the remaining reasons combined.

Mortgage brokers reported that re-mortgages accounted for 60% of buy-to-let cases in the second quarter, up from 48% in the previous quarter, as new lending for house buying fell because of the lockdown. 

Just Mortgage Brokers director Carl Shave says the 30% figure isn’t surprising.

“The two main drivers for people to re-mortgage is indeed for a better product and/or to raise capital,” he tells LandlordZONE. 

“The reasons for the capital raising vary and although some landlords will use this as a way to shore up their defences in relation to any financial impact caused by the pandemic, the most popular reason continues to be to invest in additional property, especially portfolio clients who are looking to increase their property holding.”

Portfolio landlord growth

Paragon’s survey also highlighted the growing prominence of portfolio landlords in the sector; landlords who own four or more properties accounted for the highest proportion of buy-to-let mortgage business, rising from 25% in the first quarter to 28% over the last three months.

Moray Hulme, Paragon director for mortgage sales, says the findings show that landlords have not only been resilient during the recent challenges but have also been planning. 

He adds: “The data also supports the idea that there is a shift towards a professionalisation of the private rented sector. This is positive because a higher number of professional landlords has been shown to correlate with higher standards in the sector.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – SPOTLIGHT: Why have so many landlords been remortgaging during Covid? | LandlordZONE.

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