LATEST: Scots landlord loan scheme extended past 31st March deadline

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The Scottish government has extended two loan schemes to give struggling tenants and private landlords with Covid-related financial problems more breathing space.

They can now apply for a Tenant Hardship Loan Fund or Private Rent Sector Landlord COVID-19 Loan Scheme, both of which offer interest-free loans, beyond the original deadline of 31st March.

This follows the Scottish government’s announcement that it is extending the ban on the enforcement of eviction orders until the end of this month, and is a strong indication that a further evictions extension is likely. As LandlordZONE reported on Monday, rumours are already flying within the property industry that this is likely to happen.

Tenant fund

The tenant fund is designed for those who have no other means of housing support. Loans are available up to a maximum of nine months’ rent, for arrears built up since 1st January 2020 and can include up to three months of future rent payments.

Landlord scheme

The landlord scheme offers eligible landlords up to 100% of lost rental income for up to three properties. It helps those who are not classified as businesses, have five or fewer properties to rent and have lost rental income due to tenants being unable to pay rent as a result of the pandemic. Applications for both can be completed online.

Housing minister Kevin Stewart (main pic) says that throughout the pandemic its focus has been on enabling people to stay safe in their homes.

“These schemes have provided vital support”, he says: “For the majority of tenants facing financial difficulties and arrears the best means of support continues to be regular non-repayable support, for example through Universal Credit and Discretionary Housing Payments.

“However, for those who may fall through the gap and are unable to claim such support, these funds offer a helping hand to manage any rent issues that have arisen in the last few months as a result of Covid-19.”

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New strategy for Scotland’s rented sector

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Rented sector strategy will be part of a major new housing publication written by the Scottish government apparently looking to improve accessibility, affordability and standards, as part of a new 20 year route map for housing to be published next week.

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ANALYSIS: Is the commercial property sector bombed out?

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The popular conception is that commercial is a write-off, but the reality is somewhat different, and as always in crises, investment opportunities are created

Along with the rest of the stock market, the share prices of commercial-property companies collapsed in March 2020. The realisation that COVID was far more than a bad flu epidemic hit the property industry like a hammer blow, especially as the full impact of the lock-down kicked in.

Notwithstanding the already declining retail sector along with the British high street and the accelerated growth of online and home deliveries, the impact of the pandemic has been devastating for much of the commercial property sector.

With rent arrears and late payments across the board in retail and leisure, there has been a dramatic knock-on effect on valuations. Home working and transport restrictions have had an equally dramatic impact on offices.

Boom sectors

However, it’s not been all bad news. Warehousing, supermarkets, and property that’s housing essential services such as medical have fared far better or even improved.

Although student accommodation and retail parks have taken what is hoped is a short-term hit, pandemic recovery is likely to correct this, but it’s unlikely to help the structural long-term decline in much of retail, and especially many shopping centres. 

The Investment Property Forum (IPF) reports that the overall impact of the pandemic on the return from commercial property in 2020 was on average merely a negative of 1%. This is made up of minus 5% on capital return, and minus 4% of income. Those sectors in decline have been largely balanced by those that have benefited, or at least remained steady.

Shopping centre nosedive

Whilst shopping centres have lost almost a quarter of their values on average, year-to-date, industrial properties in general appreciated by around 4%. Office values have declined by just 2%, this despite many of them being empty for most of last year.

IPF’s consensus forecast for 2021 predicts a modest improvement, with the industrial sector and warehousing continuing to do well, retail still in relative decline, but overall a modest across the commercial property sector rebound in 2022.

For those willing to take a long-term view, whether investing in commercial property directly, or through a fund, the crisis has probably created plenty of good value in the sector.

Charlie Ellingworth (pictured), a partner at Property Vision, a property-investment adviser, told Money Week: “This is no time to leave your capital on furlough. Though the dynamics of the sector are changing, commercial property remains an attractive asset class with yields averaging 5.2%, while interest rates are negligible”.

Mr Ellingworth pointed out that retail will still account for a third of the commercial property sector, despite an overall decline for over a decade – the result of over expansion in the 1990s and 2000s.

According to Savills the retail sector is “over spaced by 40%” due to the growth of online shopping, which is here to stay. There’s one hell of a lot of surplus retail space ripe to be repurposed. This is also where the opportunities exist for the small-scale investor.

Disused shops

Many town centres will have to go through major change if they are to remove the depressing appearance of boarded-up and deteriorating shop fronts. Conversion to residential has long been seen as the way out of the problem and it’s hard to see any alternative.

To this end the government wants to add impetus: changes to planning laws are now permitting a much more flexible change of commercial uses regime, from the conversion of closed shops to hotels and leisure uses, to the provision of town centre residential accommodations such as town houses and flats.

It’s harder to see an answer for many of the smaller shopping centres scattered across the land: an indication of the problem is given by the share price of specialist shopping centre owners Hammerson, once a member of the FTSE-100. The price has tanked by 99% since mid-2017.

Home working impact

The pandemic is bound to have some impact on offices. But this could be more in the way of deferred demand as opposed to long term decline, but the debate is still raging.

“Offices won’t die,” says Mr Ellingworth. “They’re simply too important for social interaction, collaboration and creativity.” Occupational density will likely fall, upgrading and improvements will need to be accelerated, for example separating open plan and providing whole building ventilation systems in large offices, but smaller offices will probably come into their own.

Office supply has already been in decline over recent years as more offices are helped by the relaxation in the planning rules, being converted to residential use. This will to some extent support city centre office values in the future.

Read more about commercial property.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – ANALYSIS: Is the commercial property sector bombed out? | LandlordZONE.

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Free Lockdown Learning – 3 key developments in HMO licensing

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Our next webinar is with Housing Barrister Dean Underwood from Cornerstone Chambers and specialises in HMO and licensing issues.

In this webinar Dean will be looking at three key HMO issues relating to licensing. Essential watching if you are an HMO landlord (and even if you are not!).

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Are you one of them? Two thirds of landlords fed up with higher taxes and red tape

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Tougher tax rules and red tape have caused two-thirds of landlords to consider investing outside the private rented sector in future.

New research from FJP Investment reveals that the market has lost its appeal for many, with 68% of multiple property owners reporting that buy-to-let investments have become far less attractive during the past five years.

The survey of 1,004 UK landlords and property investors, of which 344 own two or more properties, found that 71% believe they have been unfairly targeted by the government’s tax reforms and new regulations since 2016.

Two thirds (67%) said they would consider other forms of property investment that didn’t incur the same taxation and complexity as buy-to-let and second home purchases.

Two fifths

More than two fifths (44%) of landlords said they plan to sell one or more of their properties in 2021 although the same number intend to buy a house or flat this year.

However, confidence is high in regard to house prices; more than half (55%) believe prices will rise in the next 12 months, while 54% expect prices to increase by more than 10% between now and 2026.

CEO Jamie Johnson (pictured) says that although property investors are confident house prices will rise, the added cost and complexity of investing and letting out multiple properties means many are looking for other forms of bricks and mortar investment.

He adds: “With the stamp duty holiday extended until the end of June and the UK inching towards an end to lockdown, the next few months will be critical for the property market. Time will tell if there is indeed a mass exodus of investors from the buy-to-let sector, but this new research underlines the fact that there is far less appetite to be a landlord.”

Read more about selling buy-to-let properties.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Are you one of them? Two thirds of landlords fed up with higher taxes and red tape | LandlordZONE.

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LATEST: Government’s annual housing benefit bill rises to £30 billion

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The government is expecting to spend and eye-watering £30 billion on housing benefit for tenants this year, DWP minister Will Quince has told parliament.

This figure is £8-10 billion more than the Office for Budget Responsibility forecast would be needed for 2020/21 before the pandemic struck and reflects the huge financial strain the welfare state is under during Covid.

Quince’s answer came in response to questions from several MPs in parliament who are concerned that rent arrears are building to unsustainable levels.

Conservative MP Bob Blackman (pictured) said that: “The evidence produced by the National Residential Landlords Association and a lot of housing charities demonstrates that rent arrears are growing and growing very fast such that they will probably never be repaid.”

Quince, who is the Parliamentary Under-Secretary of State for the DWP, said Ministers were worried by the problem of mounting rent arrears too but said the government’s huge housing bill and other measures demonstrated it was doing all it could to support struggling tenants on benefits.

He also said the £30 billion excluded the £1 billion spent on raising the Local Housing Allowance threshold to the 30^th percentile, and that landlords and tenants are now able to request that rent is paid direct to a landlord online if ‘financial harm’ is likely.

But as LandlordZONE has reported many times in the past, the Alternative Payment Arrangements or APAs Quince refers to are not as easy to arrange as he claims.

Landlords requesting APAs can face a glacially slow and often unstaffed bureaucracy which is too easily outwitted by tenants intent on pocketing housing benefits payment rather than passing them on to landlords.

Read more about rent arrears.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Government’s annual housing benefit bill rises to £30 billion | LandlordZONE.

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LATEST: Government spending £84m a day on housing benefit for tenants

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The government is expecting to spend and eye-watering £30 billion on housing benefit for tenants this year, DWP minister Will Quince has told parliament.

This figure is £10 billion more than the Office for Budget Responsibility forecast would be needed for 2020/21 before the pandemic struck and reflects the huge financial strain the welfare state is under during Covid.

Quince’s answer came in response to questions from several MPs in parliament who are concerned that rent arrears are building to unsustainable levels.

Conservative MP Bob Blackman (pictured) said that: “The evidence produced by the National Residential Landlords Association and a lot of housing charities demonstrates that rent arrears are growing and growing very fast such that they will probably never be repaid.”

Quince, who is the Parliamentary Under-Secretary of State for the DWP, said Ministers were worried by the problem of mounting rent arrears too but said the government’s huge housing bill and other measures demonstrated it was doing all it could to support struggling tenants on benefits.

He also said the £30 billion excluded the £1 billion spent on raising the Local Housing Allowance threshold to the 30^th percentile, and that landlords and tenants are now able to request that rent is paid direct to a landlord online if ‘financial harm’ is likely.

But as LandlordZONE has reported many times in the past, the Alternative Payment Arrangements or APAs Quince refers to are not as easy to arrange as he claims.

Landlords requesting APAs can face a glacially slow and often unstaffed bureaucracy which is too easily outwitted by tenants intent on pocketing housing benefits payment rather than passing them on to landlords.

Read more about rent arrears.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Government spending £84m a day on housing benefit for tenants | LandlordZONE.

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All social housing residents should be treated with respect and dignity

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Social housing residents will be helped with improving their living conditions through a new government campaign, ‘Make Things Right’, will help residents raise complaints if they are unhappy with their landlord and struggling to get problems resolved, with clear advice on how to progress issues to the Housing Ombudsman if necessary.

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EXCLUSIVE: ‘No hope of deadline extension’ for electrical checks ahead of April 1st cut-off

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Landlords and letting agents are likely to have to meet the new Electrical Safety Standards by 1^st April, despite attempts to push back the deadline.

Rented properties must comply with the regulations by the beginning of next month, requiring landlords to have electrical installations inspected and tested by a qualified and competent person, at least every five years.

In December, Propertymark warned the government that the huge task of ensuring all rented homes would comply in time was unlikely and that an “anticipated and widespread failure in compliance” would follow.

Lockdown blamed

It largely blamed the lockdown – slowing work and causing tenants to be reluctant to admit tradespeople, along with a shortage of qualified electricians. However, the trade body says it has had no indication from the government that the deadline will be extended.

The National Residential Landlords Association says its members have also raised concerns about an inconsistent approach to the regulations being adopted by inspectors.

A spokesman tells LandlordZONE: “We have raised this with the government and are expecting the relevant professional and trade bodies to issue guidance to ensure a more consistent approach.”

It says it’s aware of cases where tenants have refused access to properties for landlords to comply with the regulations. “In such cases, landlords should ensure they record where they have attempted to gain access to the property but been refused it by the tenant.”

Timothy Douglas (pictured), Propertymark’s policy and campaigns manager, agrees that it’s important to document all activity relating to arranging, planning and scheduling work relating to compliance with electrical checks.

He adds: “Creating a paper trail of communication between tenants, landlords and electricians will safeguard agents against any enforcement activity where work could not be carried out during the pandemic.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – EXCLUSIVE: ‘No hope of deadline extension’ for electrical checks ahead of April 1st cut-off | LandlordZONE.

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Property values: What does 2021 have in store for landlords?

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Despite a recent slowdown, house prices are predicted to carry on rising throughout 2021, landlords will be relieved to hear.

The latest figures from the Halifax and other expert’s forecasts indicate that house prices are set to remain steady in 2021.

Last week’s budget, with its extension to the stamp duty holiday and other measures to support  mortgage borrowers, means the property market looks set for another mini-boost, at least in the short-term.

The Halifax figures showed a stalling of prices in the first two months of the year, but that was before Rishi Sunak’s budget last week when he delighted those buyers with purchases pending, taking the pressure off from completing before the 31^st of March.

A buyer of a £500,000 property will save £15,000 if the sales goes through before the stamp duty concession ends.

Pause

There was a definite pause in the upward trend in prices in the second half of last year, when prices rose by an average of 5.2% in the year to the end of February.

The Office of Budget Responsibility (OBR) had predicted a fall (mini-crash), a fall off of the stamp duty holiday “cliff-edge”, of 8.3% but this was before the Chancellor announced his extension and his further measures to  taper the end of the holiday.

Russell Galley, Managing Director, Halifax (pictured), says: “Having enjoyed an extremely strong period of activity in the second half of last year, the housing market continued its softer start to 2021, with average prices down very slightly (-0.1%) compared to January.

“However, with annual house price inflation currently at +5.2%, property values remain comfortably higher than 12 months ago, when February was the last full month before lockdown.

“The housing market has been at something of a crossroads at the start of this year, with upcoming events key to determining the path of activity and prices over the next few months. The government’s decision to extend the stamp duty holiday – one of the main drivers of demand from home movers during the pandemic – has removed a great deal of uncertainty for buyers with transactions yet to complete.”

Stabilised market

Forecasts put out by Capital Economics, The OBR and Knight Frank also support the view that the budget measures have stabilised the market in the sort-term with a forecast of an 8.1% rise above a year ago, coming up to the stamp duty holiday deadline, but then easing down again gradually towards the year-end.

With buy-to-let rental property still in high demand – properties selling as soon as they come onto the market in many locations – and a move out of city centres towards urban and rural living, some properties are selling at above average prices.

It seems that property is still a relatively safe and sensible place to have your money, especially when compared to other forms of investment.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Property values: What does 2021 have in store for landlords? | LandlordZONE.

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