Rent to Rent Contracts – lots of questions?

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Do I need to protect a deposit via a protection scheme if received from a company for the lease of my house to them, if it is a commercial let and therefore NOT an AST?

Is it best to contract out of the L &

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Students need more rights to protect them from landlords, says Scottish Labour

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Labour MSP and housing campaigner Pauline McNeill has launched a student charter in a bid to give Scottish student renters more rights.

The charter includes the belief that they should be encouraged to set up tenants’ unions and housing co-operatives, and that student rents should be subject to regulatory control through the Fair Rents Bill.

The Shadow Minister for Housing, Communities and Equality (pictured) is currently trying to get this Bill through parliament, which would cap rent rises at 1% above inflation and give renters protection against excessive or unfair rent increases.

Speaking in a Holyrood debate, McNeill asked Nicola Sturgeon how the Scottish Government planned to help students who will lose out financially on their accommodation costs as a result of the staggered return to universities.

She said: “Can the first minister continue to assure parliament that she will keep in contact with universities when students return to campus to take up university accommodation, to make sure they benefit from face-to-face teaching and are not in their accommodation unnecessarily and to ensure they got the financial support they need for their rent?”

Students protected

Sturgeon replied that she would do this and agreed that students should be protected from any exploitative practices.

“It is really important that universities and accommodation providers discuss with students how they will not be disadvantaged,” Sturgeon said.

She added that there was already discretionary funding for students who found themselves in financial hardship.

“Students are among the many groups in society that have been impacted severely by Covid and it is absolutely right and proper that we do everything that we can to support them.”

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What’s the future of “Buy-to-Let”

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Making big predictions about the housing market investments is something of an annual sport. But with the property market, the mortgage markets, and what landlords are likely to do in 2021 and beyond, it will be almost impossible to get predictions right. Given an economy that’s shrinking and with people worried about their jobs and businesses, times have never been more uncertain, but there are of course some property trends and forecasts we can always rely on.

When it comes down to it, in a fast changing environment – and today things seem to change faster than ever they did, even without the turmoil of the pandemic and Brexit – we still like to look into our crystal ball to try and see what might happen next.

The Covid-19 pandemic is having a big impact on the UK housing market one way or another: transaction levels, house prices, changes is occupier requirements, urban to regional movement, changing fortunes for some cities, regions and towns, lending activity and of course rental demand; but whether some of these changes are tactical and sort term or long-term structural, remains to be seen.

We’ve never lived through stranger times, not in most people’s lifetimes, so with major parts of the economy shutting down and then opening up at random, some people and businesses are suffering terribly, but the housing sales market, egged on by a stamp duty moratorium, is currently booming.

Landlords’ Survival

Residential landlords fall basically into two camps: there are those with sufficient resources to comfortably see this period through; they are generally taking a magnanimous approach with their tenants, helping those that are struggling, reducing rents by up to 50%, deferring rent payments, or telling their tenants to “pay what you can”. These landlords are looking to the longer term and retuning the loyalty shown to them in the past by their good tenants.

In the main, the so call “professional” landlords, those with portfolios of properties, often owned through a limited company, are fairing better. There are fewer requests from this cohort for mortgage payment referrals, that’s according to the mortgage lenders.

There’s also the landlord who buys outright or is mortgage free and in the comfortable position of not relying on their rental income to live on, or pay a mortgage every month.

Into the other camp fall those landlords who have borrowed heavily and/or are relying on their rental income to live on. Of these, and there are many – the statistics show that around 60% of rental housing in the UK is provided by landlords with no more that two or three rentals – some will be in trouble. A large proportion of them are mortgaged and have bought the properties for their retirement income. It then comes down to luck as to whether they have tenants who are able to pay full rent, or at least a good proportion of it.

So by no means all buy-to-let landlords are in a position to help out their tenants. After successive chancellors have squeezed their incomes through punitive tax and regulatory changes, the effect on their income, and the uncertain outlook, has prompted some to look to sell up.

But to use the old hackneyed phrase, “it’s an ill wind that blows no good”: out of adversity comes opportunity. Landlords and others with cash to invest believe there are investment opportunities that could yet emerge. This movement could even result in increasing demand for rental property next year, given that the pandemic could result in still greater demand from tenants for renting.

Generally the impact on viewings and house moves, whether by owner occupiers or renters, has been less than feared back in April. This is largely because the shut-downs have still allowed this activity, with agents working relatively normally, despite the delays in dealing with house sale searches and legals.

The government’s furlough and business support schemes have been generous, some think too generous with money flowing so freely it’s created opportunities for fraud. Lenders have been flexible with mortgage payments. It has been welcome and all this support goes to help people get through this crisis. The question on everyone’s mind though, as we approach the Christmas holiday is: how long can this go on before the money runs out, and will the vaccines kick in quickly enough to present third and forth waves of the virus?

Lenders are finding that those landlords most likely to come through this unscathed are those who have become more professional and businesslike in the way they approach by-to-let: there are far fewer “dinner party” landlords says one mortgage lender, and far more landlords who take the business of letting seriously; they manage tenancies well and have built-up a financial safety cushion.

Zoopla monitors demand for lettings and finds that following a drop off in demand during the early part of the first lock-down, it has made up for that in spades since, with people looking for the short-term flexibility the rental market offers. The short term surge in activity is likely to continue as pent-up demand is released by the partial relaxation of lockdowns. But the longer term effect will not become clear until we see the impact of the ending of the furlough scheme. If even a proportion of the 7.5m or so people currently on furlough find themselves out of work when it comes to an end next April, it could have a big effect on the supply – demand balance in the rental market and therefore on rents levels.

Future Investment?

The idea that property is a good strong, long-term investment has not changed. It’s a hedge against inflation and provides a good income yield of 4% and upwards, at a time when you are lucky to get more than 0.5% on deposit.

As we see the exit and decline in the reign of the so call “amateur landlord”, gradually being replaced by those who see landlording as a serious business, we find that these people can see past the present crisis; they have a long term investment horizon mindset.

Jeff Knight, director of marketing at Foundation Home Loans, writing for the FT, says:

“It may well be that come the middle of 2021, circumstances will have changed significantly, and it will be at this point that borrowers will appreciate their ability to perhaps remortgage without any charges being attached.

“Overall, landlords are acutely aware that demand for quality private rental sector properties is only likely to grow as a result of the pandemic; they also know that demand currently outstrips supply, that house prices may be subdued during the rest of this year, and therefore there are opportunities to garner both stronger rental yield and grow capital values by investing now.

“Coupled with a responsible approach to their tenants and a long-term outlook, the prospects for buy-to-let remaining a good investment for the foreseeable future look assured.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – What’s the future of “Buy-to-Let” | LandlordZONE.

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‘Rightmove for landlords’ property portal launches after 18-month wait

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A property portal that is claiming to be a ‘Rightmove for landlords’ by enabling buy-to-let investors to search for properties using landlord-friendly data has launched.

Property.xyz is the brainchild of former North West estate agent and property investment consultant Rob Jones (pictured) who has spent the past 18 months preparing and launching the website.

In 2018 he began looking at turning his then one-on-one investment service into a scaleable national platform that would achieve the same outcomes for landlords, but be much simpler to use.

The website soft-launched in August this year but is now ready to roll after months of user testing.

“We wanted to know what extra features investors and landlords needed and how the property search could work better,” says Jones.

Intelligent portal

“Our aim is to build the world’s most intelligent property portal with two key aims for landlords – a new way to search that’s unique for every user including by using yield, buyer demand and house price growth, but also a housing market and ‘investment potential’ research tool.”

Property.xyz is also planning to launch services that will allow much more local and granular data including looking at local yields per square foot, for example, and refurbishment potential.

“It’s the kind of information you’d have to gather yourself either on foot or by phoning up agents and other sources of information,” says Jones.

“There are loads of data sources out there but the skill is bringing it all together into one place that makes sense.”

But it’s the platform’s search function that will attract many landlords and investors, which as well as investment information includes planning and in future is to be upgraded with compliance information such as EPCs, Gas Safe, electrical safety and licensing.

Visit Property.xyz

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OFFICIAL: Private rented sector shrinking outside capital, says latest report

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The government’s latest English Housing Survey of 23.8 million homes has revealed that the number of households within the private rented sector outside London has slipped by 2% since 2018.

This is likely to be used by government to vindicate its ongoing attempts to limit the PRS sector and the multi-billion pound investment in Help to Buy in recent years, which have helped over 1.2 million people out of the PRS and into ownership.

But when London is taken into account, where 28% of all households are within the private rented sector, in England overall it holds steady at 19%.

The survey’s results also show that 7% of all privately rented homes are overcrowded, an increase of 1% on the previous year and the highest level for over 25 year. This means some 308,000 are overcrowded in England.

Also, 12% of dwellings in the social rented sector failed to meet the Decent Homes Standard. This is lower than the proportion of private rented (23%) and owner occupied (16%) homes.

Other highlights of the report:

Safety first?
10% of the housing stock had a HHSRS Category 1 (potentially life threatening) hazard, down from 21% in 2009. Such hazards are more prevalent in the private rented sector (13%) than the owner occupied (10%) or social rented sectors (5%).

Greener renting
The social sector remains more energy efficient than the private sector. In the social rented sector, the majority of dwellings (61%) were in EPC bands A to C, compared with 38% of private rented sector dwellings and 36% of owner occupied dwellings.

Renting most expensive
The mean weekly housing costs for private renters was £200 compared to £172 per week for mortgagors, £96 per week for local authority tenants and £106 for housing association tenants. The average private rent in London was £341 per week (71% higher than the national average).

Deposits more widespread
Despite being a legal requirement only 77% of private renters paid a deposit when moving into a private rented property although this up from 70% a few years ago.

Read the latest English Housing Survey in full.

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High Court enforcement action against Liverpool City Council

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We have a tip-off that High Court enforcement action is, currently underway against Liverpool City Council, with dozens and dozens of Writs to the tune of around £100k being executed for, what is believed to be, Data Protection/GDPR breaches against a landlord specifically in relation to the running and administration of their BTL property.

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Watch: How to avoid burst pipes

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Watch Hamilton Fraser Total Landlord Insurance’s video on how to avoid burst pipes during the colder months

Escape of water in rental properties is often a costly problem for landlords, and with labour and material costs rising, repairs of this nature are only getting more expensive.

A common cause of escape of water is frozen or burst pipes, which tend to occur more frequently during the winter months.

But what can you do to avoid burst pipes in your property? Hamilton Fraser Total Landlord Insurance has prepared a video to help you understand.

Visit Hamilton Fraser Total Landlord Insurance’s expert guide to find out more information on how to avoid costly repair bills for damage caused by burst pipes in your property.

Hamilton Fraser Total Landlord Insurance has also put together a helpful advice sheet to assist your tenants with preventing pipes from bursting and the steps to take in the event of a burst pipe.

For further guidance on getting your property ready for the winter months visit Get winter ready – everything you need to protect your property.

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Private landlords have done everything they can to support renters

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Private landlords have been giving more help to tenants who cannot pay their rent as a result of Covid-19 than those in the social sector according to the English Housing Survey published today.

Since the start of the pandemic 6% of private renters had secured a reduction in their rent payments compared to only 2% in the social sector.

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OFFICIAL: 569,000 private tenants in rent arrears, most recent figures reveal

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At least 569,000 private renters in England were behind on rent or at risk of arrears during the key Covid-impacted summer months, a government survey has found, a figure which is likely to have increased since then.

The Household Resilience Study, conducted in June and July to guage the affect of ‘wave 1’ of Covid, found that 7% of private renters were in rent arrears, up from 3% in 2019-20, with a further 9% very or fairly likely to fall behind with rent payments in the next three months, representing about 290,000 households.

Of those, half had fallen into arrears for the first time after COVID-19 restrictions were introduced, compared with 22% of social renters.

One in 20 private renters and 4% of social renters reported losing their job compared with 3% of owner occupiers, which contributed to the finding that 35% of renters’ household monthly income dropped by at least £100 due to COVID-19.

Almost a fifth of those on furlough were in rent arrears, compared with 9% who weren’t, along with 23% of those on Universal Credit, compared with 7% of those not receiving it.

Alicia Kennedy, director of Generation Rent (pictured) says the figures show just how hard private renters have been hit by the pandemic.

She adds: “Government support has not been enough to stop rent arrears doubling, which is causing severe hardship and crushing the hopes and dreams of thousands.

“To put struggling renters back on their feet, the government must increase Local Housing Allowance to cover average rents and provide grants to clear the rent debts that have built up.”

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PICTURES: £60,000 fine for slum landlord over multiple unlicenced HMOs

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A criminal landlord who housed restaurant workers in dangerous and overcrowded conditions in several unlicensed HMOs has been fined £60,000 with £9,000 costs.

Shen Residences and its former sole director Zhiqiang Shen were found guilty of breaching HMO regulations at the properties where staff at Ipswich’s Spoon World Buffet were sleeping in bunkbeds.

Pictures of the property released to the media include outdoor toilets (pictured) and basins and tiny bedrooms crammed with beds.

The conditions were found to be so dangerous that environmental health officers served an emergency prohibition order banning their use for sleeping with immediate effect.

Lengthy trial

The trial followed a lengthy investigation by Ipswich Borough Council which started in June 2019 after a council tax inspector alerted them to the condition of two neighbouring premises in the town’s Woodbridge Road.

Colchester Magistrates Court heard that despite initial attempts by Shen to mislead the investigation, it emerged that they were used to house workers. 

The two properties and a further building in Granville Street, Ipswich, were visited during early morning operations by police and the Gangmasters and Labour Abuse Authority in August and October 2019, and in February 2020.

Shen Residences has been fined £40,000 for the offences, and Shen, of Manor Road, Chatham, Kent, was fined £20,000 along with £8,931 in legal costs and a £190 victim surcharge.

Councillor Alasdair Ross told The Ipswich Star newspaper: “This case shows [we] won’t tolerate residents being put at risk in either sub-standard or unlicensed HMO accommodation and will take the steps to hold to account those responsible for such.”

Read more about recent HMO fines in Ipswich.

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