LATEST: Food and retail shops ask Ministers for more help to pay their landlords PLUS a delay to rates re-start

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Retail and catering bosses have called on the Government to give them more breathing space, warning that when landlords take back the keys, thousands of sites and jobs will be lost.

Retailers have told the Treasury that reinstating business rates in full next April will make 800 stores non-viable overnight, at a cost of 10,000 jobs; it follows a report last week that 125,000 retail jobs have been lost this year. 

Meanwhile, UKHospitality has written to Chancellor Rishi Sunak and the Secretary of State for Housing, Communities and Local Government Robert Jenrick warning that a “bloodbath” of hospitality business failures will follow the end of the moratorium on lease forfeiture and debt enforcement if action isn’t taken.

The letter says: “Many landlords have already made it clear, in writing, that they will use the end of the moratorium to issue winding-up petitions to large high street chains and individual businesses.” 

The Government’s emergency measures to protect tenants such as preventing landlords from serving statutory demands or winding up petitions are due to expire on 30th September.

UKHospitality believes if tenant protections were extended until next spring, firms that suffered a lack of revenue in lockdown could enjoy Christmas trading, making them more able to repay debt.

The trade body predicts that by the time the moratorium is lifted on 1st October, the sector’s unsettled rent bill will amount to more than £1bn.

Law firm Baker McKenzie explains that receipt of the September quarter’s rent is a potential danger zone for landlords.

It adds: “There is a risk that accepting rent for the September quarter after 30th September but before dealing with any outstanding breach of covenant (such as the failure to pay rent during lockdown) will waive the landlord’s right to forfeit the lease for such breach.”

Read more about quarter rents.

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‘Get on with it and deliver Section 21 ban’ council urges government

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Hackney Council has renewed calls for a permanent end to Section 21 evictions, arguing that extending the ban to cover Christmas doesn’t deliver the ‘long-term security tenants desperately need’.

The London borough says that while it welcomes the extension of support so landlords can’t evict tenants until March 2021 – apart from in extreme cases – renters deserve more than a series of temporary fixes for what was a permanent problem long before the pandemic hit.

Throughout the crisis Hackney Council has been urging the Government to provide a long-term plan to support private renters and earlier this month wrote to Housing, Communities and Local government minister Robert Jenrick asking for the current ban to be extended until its promise to end unfair Section 21 evictions is delivered.

Although the Government had originally committed to ban ‘no fault’ evictions in April 2019, it is yet to implement the changes.

Mayor Philip Glanville (pictured, above) says a full ban is a ready-made measure that finally gives renters the protection they need.

“The coronavirus crisis has shone a light on the complete absence of security and stability that thousands of private renters in Hackney and millions across England face,” he says.

“After more than 18 months of delay, it’s time that ministers got on and delivered it.”

Hackney Council believes that with more than 30,000 households in the borough now renting privately, nearly one in three residents are vulnerable to eviction.

In June it wrote to all its 2,500 registered landlords asking them to offer time and flexibility where tenants were struggling financially, and to consider rent reductions where a tenant really couldn’t pay.

The government announced it intention to ban Section 21 ‘no fault’ evictions last year but, after a significant consultation process, has yet to reveal its intentions.

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Guidance for lenders to support borrowers post mortgage holiday period

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The FCA has published additional guidance for firms, to ensure that consumers who have benefited from payment deferrals under the current guidance who still face financial difficulties, as well as those whose financial situation may be newly affected by coronavirus after the current guidance ends

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LATEST: Renters join the urban exodus to seek spaced-out suburbia

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Renters have joined home buyers in the ‘space race’ by rushing to the suburbs where the number looking to rent is up on last year. 

As tenants’ priorities change, Hamptons International reports that up-sizers have swapped smaller city centre flats for three-bed semis on the fringes of town.

According to its monthly lettings index for August, 34% of tenants moving home post-lockdown added at least one extra bedroom to their new property, up from 25% during the first three months of the year.

It also found that 25% of moves post-lockdown were from a flat to a house, up on 16% pre-lockdown. 

Tenants living in the South East were most likely to trade up, with 47% of those moving adding at least one bedroom and spending an additional £266 pcm, followed by the North West (37% adding at least one bedroom) and then London, where 33% added at least one bedroom. 

All this upsizing means that these renters paid an average of 23% or £149 a month more in rent.

Lower rents overall

But rents country-wide fell for the fourth month in the last five. Average rents on newly let properties were 0.5% lower than the same period last year, driven by falls in London and the South.

Fewer homes

Across the country, there were 11% fewer homes available to rent than in August 2019, says Hamptons, with northern regions recording some of the largest falls. 

The North East saw the largest decline, with 45% fewer homes to rent than at the same time last year.

Hamptons’ head of research Aneisha Beveridge (right) says: “The number of homes coming up for rent is down on last year, partly due to landlord purchases being much slower to bounce back in comparison to the number of homes bought by first-time buyers and owner-occupiers.”

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Law Society comment on government protection of tenants

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The Ministry of Housing, Communities and Local Government has announced further measures to protect renters.

Law Society of England and Wales president Simon Davis said: “Possession hearings restart on 21 September, meaning that landlords are able to commence hearings to evict tenants.

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New short-lets platform targets apartment block landlords with Airbnb-style service

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An new British online platform that’s hoping to take on Airbnb and make hay from the US firm’s difficulties over here has secured the backing of a major property industry figure.

Robin Paterson, who was instrumental in building many of the UK’s estate agency brands during the 1990s including Hamptons, Cluttons and Barnard Marcus, has come onboard at Stayo.co as its non-exec chairman.

As many landlords will be aware, Airbnb has endured a torrid six months as the Covid restrictions, worries over party houses and both local authority and freeholder backlashes over problems caused by the rapid growth of the short-lets platform have battered its reputation.

Stayo hopes to benefit from this by directly sub-letting blocks of apartments from freeholders, initially specialising in mid- to up-market London neighbourhoods.

Dedicated team

It claims to be different from other platforms because it offers a comprehensive end to end management service, whereby its dedicated team is responsible for all aspects of the accommodation as well as the ‘guest experience’.

“The Corona pandemic has offered an opportunity for those companies brave enough, to completely re-evaluate how they do things and dramatically change for the better,” says Paterson (right).

“It is a pleasure to work with the Stayo team who have this courage and conviction in repositioning their business due to the cataclysmic consequences of Covid-19”.

Stay currently has 43 units within 10 buildings across central London, although its target is to grow the portfolio to 300 units over the next three years, before expanding into other UK and European cities.

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Ex-tenant threatening legal action over parking?

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A tenant that has recently vacated one of our properties left the place in such a state that we said we would need to keep some of his deposit to cover deep cleaning and removal of many items left behind.

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LATEST: Northern Ireland evictions ban extension starts after three-week wait

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The Northern Ireland Assembly has passed its new eviction ban legislation – three weeks after first announcing its intention to bring in the six-month extension.

Landlords will have to give tenants a 12-week notice to quit before seeking a court order to begin proceedings, until 31st March 2021.

This applies to all tenancies, irrespective of the duration; for tenancies of less than five years the period has been increased by eight weeks, for those between five and 10 years it’s been increased by four weeks and for tenancies of more than 10 years, the notice to quit period remains the same.

ARLA Propertymark’s Daryl McIntosh, strategic development manager for Scotland and Northern Ireland, says: “Extending the ‘notice to quit’ periods to help prevent or reduce significant numbers of households becoming homeless at a time of national crisis, while keeping a fair balance for landlords being able to get return of their property, is a welcome and pragmatic approach by the Department for Communities.”

The emergency period, put in place back in April, had been due to end on 30th September but the Assembly announced the change on 19^th August, in line with England and Scotland. It plans to review the new date in January.

Communities Minister Carál Ní Chuilín says landlords shouldn’t start or continue possession proceedings without a very good reason to do so. “It is essential that we work together during these uncertain times to keep each other safe.”

She adds that both landlords and tenants can get specialist help and advice from the department-funded Housing Rights which can work together with them to resolve disputes.

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Radical UK planning reforms could benefit property investors and landlords

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Prime minister Boris Johnson who has described the existing planning system as a “relic” that’s “outdated and ineffective” says the new proposals are “unlike anything we have seen since the second world war”.

In a report published today titled Planning for the Future, the government details plans for upcoming changes to the planning system in England.

The Planning for the Future report and a consultation process which closes on the 1^st of October proposes major reforms of the English planning system to “streamline and modernise the planning process, bring a new focus to design and sustainability, improve the system of developer contributions to infrastructure, and ensure more land is available for development where it is needed.”

The changes will be of concern to anyone involved in converting, building and developing properties in England and promise to remove some of the existing planning process bureaucracy to speed up the process in the future.

Plans were already in train to expand permitted development rights announced recently by Housing minister Robert Jenrick, but the Royal Institute of British Architects (RIBA) is less than impressed with this branding these proposals “a disgrace”.

Doubtless the government puts forward these proposals in its report with the best of intentions for the planning system in England, when Johnson says, “The whole thing is beginning to crumble and the time has come to do what too many have for too long lacked the courage to do – tear it down and start again.” However there is likely to be strong opposition from many stakeholders, politicians and the general public before any changes can be agreed and set into firm legislation.

Briefly, the proposals include automatic approval for designated areas and the following points to be incorporated:

• The redrawing local plans produced by the Local Planning Authority (LPA) to categorise land into only one of these three categories: growth, renewal or protected.
• Planning to be “automatically secured” for areas categorised for growth. Some developments would be allowed in renewal areas but restricted in protected zones.
• Local authorities to be bound by a new national requirement for the number of new homes to be built in their areas.
• The planning approval process to be overhauled and sped-up so that projects get through in under 30 months or be sanctioned.
• A “fast-track for beauty” process to grant automatic permits for “proposals for high-quality developments where they reflect local character and preferences”.
• The “Building Better, Building Beautiful” developments that comply with local design codes to be guaranteed faster planning permission.
• “Pattern books” and style guides for “popular and replicable designs” to be used for permitted developments and schemes in land designated for renewal.
• Section 106 payments (obligations on developers to contribute to local amenities and improvements as part of planning approval agreements) to be replaced by an infrastructure levy.
• There would be discounts for developers building affordable homes.
• Local authorities would be allowed to borrow money against their infrastructure levy revenue to fund their projects.

A major thrust of the report calls for greater use to be made of data and digital technology by local authorities were local residents can view and respond to maps and visualisations of upcoming development proposals online. From there, decision-making should be faster and more certain, within firm deadlines, says the report.

The RIBA has highlighted its concerns about the proposed changes, calling for “urgent reconsideration” of proposals to deregulate planning. “Deregulation is not the way to bring about new homes,” said RIBA president Alan Jones.

Want to know more about these planning proposals and the likely outcomes for property investors? See details of the upcoming Planning Masterclass Webinar here Property Investor News – https://property-investor-news.com – by experts Richard Bower (Editor) and David Kemp (planning specialist)

Open consultation – Planning for the Future

Changes to the current planning system

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Mortgage lender returns to holiday lets after ‘tsunami’ of landlord applications forced it to withdraw

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Another major mortgage lender has re-joined the holiday let market after it was swamped by demand earlier this summer.

Ipswich Building Society (IBS) says it received so many applications from landlords looking to capitalise on the staycation boom in July that it was forced it to withdraw products.

It’s now decided the time is right to introduce its holiday let range again, along with its standard residential and buy to let ranges, which includes residential deals at 85% LTV, as well as reinstating lending on properties worth more than £1m.

CEO Richard Norrington says: “We’ve been keeping a keen eye on the market and taken careful consideration over the appropriate time to re-enter.

Service standards

“It is important we introduce and maintain a suitable range of products which enable us to uphold our service standards.”

IBS holiday let mortgages are available at 80% LTV, with a minimum loan of £75,000, a maximum loan of £500,000, an application fee of £199 and a completion fee of £950.

Its two-year fixed rate at 3.25 % is fixed until 31stDecember 2022, while its two-year discount rate at SVR (currently 5.24%) minus 2.25%, gives a current pay rate of 2.99% for two years from date of completion.

The five-year fixed rate at 3.75% is fixed for five years from date of completion.

The number of holiday lets mortgage products continues to rise, according to Moneyfacts, which counted 74 in August from 14 providers – up from 60 products on offer in July.

Read more about the staycation buy-to-let boom.

Visit IBS.

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