How Landlords can take advantage of the new government Green Homes Grant

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The new government Green Homes Grant will give up to £5,000 in vouchers to landlords to make their homes more energy-efficient. This scheme is part of a £3b investment in green technology to promote energy efficiency, as well as to help boost the economy during the coronavirus pandemic by creating jobs.

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EXCLUSIVE: Jersey landlords head off proposed island-wide property registration scheme

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Jersey landlords are breathing a sigh of relief after politicians on the island rejected a new licensing system for the private rented sector.

Ministers wanted to set minimum housing standards and root out rogue landlords flouting the rules by making it mandatory for all rental properties to sign up and pay for a licence and yearly inspection.

The scheme would also have revealed the location of every private rented home on the island for the first time.

However, the Jersey Landlords Association argued that to inspect and license 20,000 properties on the island was overly bureaucratic and could prompt some to withdraw their properties from the market.

Chairman Peter Lucas tells LandlordZONE that it was the right decision and that the focus should now be on empowering tenants so that they felt able to complain.

“That way we can identify problem landlords in a targeted fashion – this means understanding why tenants have historically not complained and doing everything that can be done to change that,” he says.

The association has made several suggestions, including the upgrading of leases to include important information about who a tenant can contact in the event of a complaint, and a declaration by the landlord that their property is compliant with all relevant regulations.

Jersey’s environment minister deputy John Young had wanted the scheme to help enforce minimum standards for rental properties, which were approved by the States back in 2018.

Since then, environmental health has heard 448 complaints for issues including damp, broken windows and a lack of working smoke detectors, hot water and toilets. Young says he may bring the idea back at a later date, with adjustments to meet some of the concerns expressed by his colleagues. 

Jersey already operates a voluntary a ‘Rent Safe’ scheme for landlords.

Read more about Jersey’s private rental market.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – EXCLUSIVE: Jersey landlords head off proposed island-wide property registration scheme | LandlordZONE.

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Is this a good time to invest in property?

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People like to invest in property. That’s always been the case because of bricks and mortar’s tangible nature. They see this as an advantage over buying volatile shares, topping up a pension, or even cash savings which are currently giving next to no return. But is now the right time?

Most of us have an understanding of property when we own a home, and unlike a standard pension where we wait a lifetime to see any return, an instant and growing cash-flow in the form of monthly rent payments is very attractive.

Not only that, a sensibly researched and purchased buy-to-let offers the possibility of making substantial long-term “pension like” capital gains. House prices have increased on average by one-third over the last 10 years, roughly doubled over the last 20 years, and rents have seen a steady increase over those years as well, as more and more people need to rent.

Right now the coronavirus pandemic is having a negative impact on on the economy; there could be a dramatic rise in unemployment on the way, and some landlords are finding it tough as inevitably some tenants struggle to pay their rent, but even so, these are in a minority.

We could well be facing one of the worst recessions for a generation, consequently this will inevitably have it’s effects on the security of rent returns, but also on house prices as economists are now forecasting a slump in house prices.

Successful investing is a matter of finding a balance between fear and greed, and to paraphrase one of the world’s most successful investors: you should buy when others are fearful and sell when they are being greedy.

It’s situations like this that create good buying opportunities. For those with a reasonable risk appetite and prepared to take a calculated risk, based on thorough research and due diligence, the risk is acceptable, and the rewards can be substantial. Timing and patience are key; waiting for the right time to buy, having done thorough research, usually pays off.

There are currently some really good buy-to-let mortgage deals available, fixed at low interest rates (starting as low as 1.3%) as banks are keen to lend to the right investors. By using gearing (borrowed money) within reason, investors can buy far more for their money without taking too much risk.

With interest rates at these record lows they can’t feasibly go much lower, so with a fixed rate mortgage based on a bank rate currently at just 0.1%, any up-tick in inflation can only be helpful long-term. While borrowing does increase risk if prices go down, it also magnifies gains when they go up. Over the long-term property prices have never done anything other than rise.

An interest only buy-to-let mortgage of £150,000 can be serviced for around £175 per month keeping the landlord’s costs low, while an average rent in the UK is £913 pcm. It has been estimated that around 50% of people under 40 will be renting by 2025 and average net yields for a buy-to-lets are currently around 5.9%, even higher in some regions.

With rates as low as these and potential returns this high, many existing landlords are taking the opportunity to remortgage their properties, releasing capital to make further investments as good opportunities arise. The stamp duty holiday until April next is another incentive to buy.

Yes, it’s got a lot tougher to manage rental properties and make a good profit, with increasing legislation and regulations creating more work for landlords. It’s also the case that changes to the tax regime have cut profit margins, causing some landlords to sell-up, though many landlords are adapting to the changes by buying through a limited company and managing more efficiently.

So, with the boom in the demand for rental accommodation continuing, given that economic uncertainty means people delay taking on home ownership, a shortage of rental property keeps tenant demand high and rents keep on rising

Running rental property is not all “sweatiness and light” by any means; there is work to do, there is tax to pay, repairs and maintenance needed; there are tenant problems and void periods. But you don’t make higher returns on your money money without some effort.

Despite all this landlording can be very rewarding, you are providing a community service and providing you stick to the rules and provide good quality accommodation your efforts will be appreciated by your tenants and by the authorities.

Bob Hunt, chief executive of Paradigm Mortgage Services has said:

“Looking gift horses in the mouth has never been a particular trait of private sector landlords over the last half a decade, probably because those gifts have been few and far between. Which is perhaps why the opportunity to save stamp duty on purchases, up until the end of March 2021, has been seized upon as a potential catalyst for a raft of investment purchases over the next seven or so months”

“It is a challenging time for many, and it seems important to me that the government does not overlook the fact that landlords are also challenged greatly by this situation…”

“…When the repossession ban ends on 20 September we may have a different environment though, if greater certainty can be delivered, coupled with the stamp duty saving, I have no doubt landlords will be motivated even further to add to portfolios, and advisers will no doubt benefit from what is an increasingly competitive mortgage market and a greater need for advice.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Is this a good time to invest in property? | LandlordZONE.

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HMOs: Landlords to face new planning application restrictions in Sunderland

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Landlords in Sunderland are to face more restrictive planning regulations when applying to convert an existing family home into an HMO.

The city’s council is to vote next week on the proposals, which are designed to both prevent HMO densities of more than 10% and also prevent sandwiching on residential streets.

To be introduced via a Supplementary Planning Document to be presented to Sunderland Council’s cabinet for approval on 15^th September, it will cover the whole of the city.

An Article 4 direction covering five wards already exists and within that all HMOs whether large or small must gain planning permission. In the city’s other 20 wards, only large HMOs require permission.

But if the council’s cabinet approves the plans, which will then go forward for a four-week consultation, new criteria will be applied to all new HMO applications regardless of size or location.

Two requirements will be introduced. The first will direct planners to reject an application if the density of HMOs versus family within a 100 metres radius would then go over 10%.

Also, if the new HMO creates a sandwich – i.e. two HMOs sandwiching a family home – then planners would also be asked to reject.

Sunderland snapshot

• The number of HMOs within its five Article 4 wards has increased over the past eight years from 792 to 1,065.
• There are 1,200 HMOs in total across the whole of the city.
• The council has approved 67% of all HMO applications over the past decade.
• Four wards already covered by Article 4: Barnes, Hendon, Millfield, St Michael’s and St Peter’s wards

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“The city’s stock of HMOs is contributing to meeting housing needs, yet increasing numbers of multiple occupancy properties have the potential to create harmful impacts,” says the reports sponsor, Councillor Rebecca Atkinson.

“Concentrations within neighbourhoods can lead to imbalanced and unsustainable communities and can damage the residential amenity and character of surrounding areas.

“This council recognises the issues HMOs can create and that’s why we have prepared this draft. I shall be recommending to my cabinet colleagues that we move to public consultation.”

The proposed regulations will not apply to landlords seeking to enlarge existing HMOs.

Read about Bedford, who also recent moved to introduce similar HMO planning restrictions.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – HMOs: Landlords to face new planning application restrictions in Sunderland | LandlordZONE.

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Shelter help disabled tenant win second ‘No DSS’ case

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Judge Mary Stacey has ruled in favour of Stephen Tyler in County Court that a Birmingham letting agent unlawfully prevented him from viewing a property on the basis that he was in receipt of housing benefit.

Stephen Tyler

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What are YOUR views on the evictions ban and other challenges of being a landlord today? Take our survey

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It’s time for landlords to have their say! Here at LandlordZONE we’re conducting a survey of our readers to find out how you’re feeling about making a living from your portfolio or property at the moment.

We’re asking five minutes of your time to answer five questions. We’ll be using the results to highlight to government the challenges that landlords face including how they are coping with the evictions ban – as it would seem many in the corridors of power have little idea about the burdens they have heaped on landlords in recent months and years.

In particular, we want to understand how many of you have been working with your tenants, whether they have been able to pay their rent and whether they have had to agree a payment plan to manage arrears and sustain tenancies.

We also want to understand whether landlords are planning on investing or selling properties.

You can start the survey here.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – What are YOUR views on the evictions ban and other challenges of being a landlord today? Take our survey | LandlordZONE.

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Thanks Boris! Landlord confidence crumbles as Government regulation and evictions ban hit hard

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Landlords’ confidence took a hammering in the second quarter of the year, as they were hit by the evictions ban, Government regulations and the Covid downturn.

The National Residential Landlords Association’s (NRLA) confidence index reveals that those with portfolios in London and Wales are feeling least confident about their future compared to 12 months ago, with those in the North East and North West most bullish.

But nearly all the regions improved their score from the first quarter – just as lockdown was starting. The only significant drop was seen in the South West, which the NRLA believes could just be seeing a slight lag; its previous fall wasn’t as great as many others, and it’s also where rents have seen the largest rise.

Good tenants

A fear of losing good tenants, along with local market conditions and the general state of the economy have all impacted on their decision-making, with a slight fall in the number either buying (10%) or selling (15%) in the last 12 months.

It also makes landlords believe they can’t raise rents; only 18% have done so in the last 12 months while 72% have frozen them.

But they’re certainly not suffering from a drop in demand as the survey finds that more than 60% of vacant properties are taken up within a four-week period.

Looking to the future, fewer landlords want to sell and only slightly more are planning to buy properties.

The NRLA says the gap between the two has fallen markedly since last summer and explains: “This could purely be a Covid-effect. It could also indicate that the pain inflicted by tax changes and new regulations, plus future changes in the pipeline, are now more fully baked into landlords’ plans.” 

Read the full confidence index report.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Thanks Boris! Landlord confidence crumbles as Government regulation and evictions ban hit hard | LandlordZONE.

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Extra 3% SDLT exemption/refund on probate properties?

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Hello peers, My question is regarding exemptions to the extra 3% SDLT (Stamp Duty Land Tax) currently payable on investment properties.

Is my understanding correct that the SDLT paid on probate properties is eligible for a refund if they’re turned around and sold again within the year?

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