Grainger bets on London rental revival as tenants drift back

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Brittan’s biggest residential landlord says it’s still confident about demand for London homes.

Demonstrating confidence by maintaining its most recent dividend, the £1.9bn stock market quoted residential landlord company is reporting an increase in enquiry levels, and says its conviction in London’s rental market remains strong.

Grainger has said that lettings enquiries are up by nearly 90% since the start of this year, and according to the company’s CEO, Helen Gordon, much of the demand is in London.

As people drift back to office working following the lifting of the Covid restrictions, landlords worry about the long-term implications for the letting market, particularly in the capital – will demand for rentals be affected, will there be less need to live near London offices if so called “hybrid working” becomes the norm?

Companies are beginning to look to a post-Covid future and for many the vision is a model that combines remote work and office time.

Back in the bottle

As employers grapple with the issue of deciding the best way forward for their workers, it’s becoming clear that for many employees they don’t want to the genie to be pushed entirely back into the bottle.

Surveys show that, where possible, many workers prefer a mixture of home and office working, with a 60/40 office/remote working split being suggested by the experts. This shift could have huge implications for cities, particularly in terms of transport and housing.

However, homeworking is not for everyone; there are also serious drawbacks for companies with having people working off-site – there could easily be a longer-term drift back to offices as memories of the pandemic begin to recede. It is perhaps far too early to say what the real long-term affect will be on renting in cities.

Grainger says: “Despite the short-term market challenges in London of the past year, our portfolio performed well and our conviction in London’s rental market remains.

“As a leading city, London will continue to be an attractive location to live in and it will experience population and economic growth in both the near term as restrictions are lifted, and in the longer term, which will underpin rental growth and support valuations.”

CEO Helen Gordon (pictured) adds: “We have seen good demand for our rental homes as lockdown lifts, with people attracted to everything else London has to offer, such as the bars, restaurants and culture.”

Grainger is one of the biggest residential landlords with over 9,000 rental homes, one third of which are located in London. The company has more in development across sites in the capital including Tottenham Hale.

Grainger saw its rental growth increase by 1.7% over the six months to March 31 and has maintained its shareholder dividend at 1.83p per share.

Top cities

Meanwhile, concerning renting more generally, Colliers International report that the top 10 UK cities for residential investment are: Cambridge, Edinburgh, Bristol, London, Manchester, York and Belfast.

All have strong economies with highly skilled and educated workforces, house price growth, strong rental yields and low levels of income inequality, the report by the global real estate firm finds.

The Colliers’ study compared the top cities from the UK against 20 indicators in four categories: economics, property, education and liveability.

Jo Edwards, head of Colliers’ South West and Wales office of Colliers, has said of 3^rd place Bristol: “We are seeing a range of residential opportunities and developments coming forward for a variety of accommodation, and complementary commercial space.”

Andrew White, head of residential at Colliers, has said that residential investors were often attracted to the big-name cities, but the firm’s analysis offered a “wider perspective”.

In the Bristol case, Mr White says: “With its significant regeneration programme and strong house price growth it’s only natural that Bristol has come high up on the list”.

Main pic credit: Grainger’s Millett Place near the Thames Barrier where one-beds start from £1,575 a month.

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GUIDE: The risks and rewards of bridging loans for property investors

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Bridging loans are used for a numer of reasons but particularly by property investors purchasing buy-to-let or development purposes, ir buying a distressed sale or at an auction.

In their simplest form, bridging loans are used to finance the gap between buying a new home whilst waiting for your existing home to sell so you can release the equity.

As an example, let’s say you want to buy a property for £600,000, you plan to have a £200,000 deposit and a £400,000 mortgage. But you currently only have £60,000 in cash and need your existing property to sell in order to free up the rest of the deposit.

Unfortunately.the sale of your home has just fallen through and you don’t want to risk losing your dream home which you have already paid various fees on such as surveys etc. So, you take out a bridging loan for £140,000 to ‘bridge the gap’ and repay it once your property sells.

Seems likely a fairly simple solution, right? Before you make your mind up, let’s look at bridging loans in a little more detail.

Open and closed

There are two types of bridging loans.  The first is an open bridge loan which has no set end date, meaning it can be repaid when the funds become available, although typically within six to 12 months.

The other is a closed bridge loan which is used when you know exactly when you will have the funds available to repay – these are normally used for shorter term loans of a few weeks or months.

But it is important to know that bridging loans can be quite costly, particularly open bridge loans (due to their flexibility), so you need to factor this into your calculations and your plan to repay.

s an example, annual rates on bridging loans can be more than 10% and can often have fees attached to the terms such as admin, legal and even exit fees.

The pros are obviously that they can provide a great short-term source of finance to help with a property purchase and in many cases can be repaid early without penalty.

The cons are that, if you are borrowing over a longer period, then the interest charges are likely to be much higher than a standard mortgage and if you don’t keep up with payments, your home is at risk.

Remember that having another mortgage-size debt is a big financial burden. Unless you know when your home sale is going to go through, it could leave you significantly out of pocket and therefore is not always the best way of beating property-chain problems.

 During a property boom, like now, during which buyer demand is high, the risk is lower as the chances are your property will sell sooner rather than later. 

But if the market suddenly slackens off, as it very easily could as the economic impact of the pandemic becomes reality, then buyers should take a cautious approach.

If you have been considering a bridging loan, we would advise that you consider all alternatives as well, before putting yourself in greater debt.

Have you considered selling your home to a cash buyer like WeBuyProperty? If you need to have sold your property by a certain date for any reason, feel free to contact us for a no-obligation chat about how we could help you achieve this and save you having to take out a loan.

Phone number: 0207 449 9797
Email: info@webuyproperty.com

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Illegal eviction of tenant causes outrage both in UK and abroad

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A landlord has been fined for illegally evicting a tenant and his five-year-old son by changing the locks and throwing their belongings onto the street.

The unusually callous and illegal approach of his landlord has made headlines both in the UK and in Lithuania where both the tenant and landlord are from.

Antanas Danilevicius had fallen behind on his rent payments and returned home from work to find his son’s toys strewn across the pavement. His clothes were also packed up along with his TV, vacuum cleaner, collectible coins and bedding.

Landlord Antanas Klibavicius had gone to the house in Basford Place while Mr Danilevicius wasn’t in and changed the locks. 

Sheffield City Council fined Klibavicius £416 after he admitted the unlawful eviction.  Klibavicius also has to pay £650 in compensation to Mr Danilevicius and £1,283 in court costs. 

Director of housing and neighbourhood services, Janet Sharpe (pictured), says the council has one of the most robust approaches to tackling illegal evictions of any city in the country and a zero-tolerance approach to those who intimidate and exploit vulnerable tenants.

She adds: “Everyone deserves to live in safe, good quality housing regardless of whether they rent or own their home. I am determined to carry on clamping down on the very small minority of bad landlords in Sheffield who treat their tenants badly and tarnish the private rented sector.”

Read more: illegal evictions growing in number.

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Suspected gas explosion serves as wake-up call to lax landlords

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The tragic events of Sunday morning, in which two-year-old George Hinds was killed and four adults were injured in a suspected gas explosion in Heysham, Lancashire, have sent shock waves far and wide.

Two properties (pictured above, before the explosion) collapsed and a third was seriously damaged in the blast. Following the devastating incident, 30 to 40 people were evacuated from their homes. Matt House, from North West Ambulance Service, said he had not seen an explosion like this one in the UK during his 20 years of service.

The investigation into the cause of the horrific explosion is currently underway, with officers working their way through the very difficult site. Assistant chief fire officer Ben Norman, has said that investigators are viewing a gas explosion as “the most probable cause, but we’ll only confirm that clearly when the experts make their conclusions.”

How common are explosions in residential properties?

Fortunately, explosions are rare in residential properties, but when they do occur it is generally due to gas leaks. However, an article published in The Independent in February, highlighted an ‘alarming spate’ of recent incidents – nine suspected gas explosions affecting tenants and homeowners across Britain between late October 2020 and February of this year, with four people killed and 13 injured, along with dozens of others evacuated from their homes.

Although they generally happen infrequently, the spate of recent blasts follows a 33 per cent rise in the number of gas explosions and fires linked to flammable gas, according to the Health and Safety Executive’s latest annual statistics. The figures reveal that there were 41 gas explosions and fires from flammable gas causing death or injuries in the year until April 2020, an increase from 31 incidents the previous year.

A spokesperson for the HSE told The Independent there were no plans to review the rise in cases, but some safety experts and gas safety groups have been calling on government to take a wider look at gas safety in the UK, asking why so many explosions have been happening at domestic properties lately. This most recent incident serves as a stark reminder to all property owners, of the importance of doing all you can to make sure your property is safe.

What are landlords’ gas safety obligations?

As this particularly tragic case highlights, gas safety must be taken very seriously. While property can be replaced, lives cannot. Landlords have to comply with a lot of regulations, but those relating to gas safety are among the most important. Penalties for landlords who are not compliant with gas safety regulations are up to £6,000 for each offence, or six months in jail. If a tenant dies while staying in your property due to negligence, then there’s even the possibility of being prosecuted for manslaughter, which can lead to a long sentence. 

The Gas Safety (Installation and Use) Regulations 1998 apply to any landlords providing a property with a gas appliance or with gas lines connected. Landlords must make sure gas appliances and flues are safely installed and maintained by a Gas Safe registered engineer.

If you’re letting a property with gas appliances in it, you are responsible for:

1. Scheduling gas safety checks – During a gas safety check, a registered Gas Safe engineer will make sure that your boiler is working properly and that your tenants aren’t at risk. Learn more about gas safety checks.

• Maintaining a record of Gas Safety Certificates and providing your tenants with copies – landlords must provide a gas safety certificate at the start of the tenancy (before the tenant moves in), and within 28 days of each annual gas safety check, if there is a gas installation.

• Any other maintenance associated with gas appliances you’ve provided. Although landlords aren’t responsible for the safety of tenants’ gas appliances, if they connect to the property’s appliances, you are responsible for the condition of the connecting flues and pipework.

Landlords must also be aware that, in respect of Assured Shorthold Tenancies (ASTs), a Section 21 eviction cannot be used if a copy of a valid gas safety certificate has not been provided to the tenant before the tenant entered into occupation of the property.

Steve Barnes, Associate Director at Hamilton Fraser Total Landlord Insurance advises, “The best ways to prevent yourself from facing the justifiably harsh penalties for non-compliance with gas safety, are to make sure you schedule a gas safety check at least once a year (more if you have appliances that need it) and to keep a record of your Gas Safety Certificates and checks. If you use an agent to manage your property, make sure that your contract states who is responsible for what and that your agent provides you and your tenants with new Gas Safety Certificates on at least an annual basis. If you have any questions about how gas safety might affect your insurance policy, feel free to contact our team on 0800 63 43 880. Our policy will cover most eventualities but does not include incidences of faulty workmanship or any pre-existing defects or damage or wear and tear.”

What can you do to protect your tenants and your property?

Any fire needs three things to come together – fuel, oxygen and ignition. In the case of domestic gas explosions, there are four things that need to combine: gas (the fuel), oxygen (which is present in air), the ignition (for example a lighting a cooker or switching on an appliance) and a fourth cause which is almost always poor workmanship or human error of some kind, for example poor maintenance or a faulty appliance.

Preventative measures are always the best when it comes to stopping explosions caused by gas leaks from happening; fortunately these are within landlords’ control:

1. Regular maintenance – ensure installations and annual services are carried out by a Gas Safe Register engineer. Infrequent checks to heating appliances can lead to gas leaks which can result in explosions.

• Contact details – it’s crucial to act fast in an emergency. Make sure your tenants have the correct contact details if they suspect a gas leak. Gas Safe Register has detailed information on who to call and what to do if your tenants smell gas or have been feeling unwell and experiencing headaches, nausea or dizziness and suspect it’s carbon monoxide poisoning.

• Flammable substances – advise tenants to minimise the use of flammable substances and never to leave combustible substances near heat.

• Gas ovens – if you have a gas oven in your property, make sure tenants know how to use it, and remind them to turn it off correctly.

If you smell gas or suspect a carbon monoxide leak

Call the national gas emergency helpline on 0800 111 999.

• Do turn off the gas at the meter unless the meter is in a cellar/basement
• Do put out naked flames
• Do open doors and windows
• Do keep people away from the area affected
• Don’t smoke or strike matches
• Don’t turn electrical switches on or off

For more information on landlords’ responsibilities for gas safety, including what to do if your tenants prevent you from carrying out a gas safety check, read Hamilton Fraser Total Landlord Insurance’s Landlords’ guide to gas safety: everything you need to know.

As a valued LandlordZONE reader you’re entitled to 20% off Hamilton Fraser Total Landlord Insurance’s policies, call the team today on 0800 63 43 880 quoting code LZ2021 or get a quote online in under 4 minutes. 

Pic credit: Google

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Carer’s allowance claim v rental income

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I am looking to make a claim for carer allowance, having had to retire at 63 and to move back home to care for elderly ill parents. My company pension is not included in the rules for carer allowance.

However

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Portuguese Golden Visa popularity

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Astons, the international experts on real estate, residency and citizenship through investment, has revealed that it’s not just green list inclusion for UK holiday makers that could see travel to Portugal increase this year, with investment into the nation’s Golden Visa program also expected to climb in 2021.

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‘Property guru’ deletes social media post criticising the poor

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Property guru Samuel Leeds has managed to drum up the wrong kind of publicity again by using social ‘baiting’ techniques on Twitter.

Tweeting a photo of himself in front of a white Range Rover (pictured, above), he boasted: “The reason most people fail in business is because they suck. If you can’t get rich when living in the UK in 2021, then you probably deserve to be poor.”

This incurred plenty of mirth and wrath among hundreds of Twitter users and resulted in Leeds deleting his original tweet.

Some posted links to Danny Butcher, the former soldier who took his own life after getting into debt by spending thousands on a Property Investors training course.

Another of Leeds’ tweets sparked much hilarity among the online community. He posted: “When it’s 11pm and you’re still searching for that property deal,” showed him looking into the window of an estate agent.

One Twitter user joked: “You’re gonna love this website called Rightmove. You can even browse it while eating your kebab.” Another remarked: “Siri, how do I embarrassingly tell people every day that I’ve got money?”

Baggy jumper

Many of the tweets have taken aim at his clothes in the original tweet – baggy jumper and denim shorts. Said one: “Pipe down and stop raiding the local Scope bags.” And another posted: “Money can’t buy looks, personality or humility it seems.”

His last typically modest Tweet on the subject: “I dress like shit but still make more money than all of my haters put together,” was also roundly mocked.

One said: “To have to tweet this shows desperation. No expensive training courses being sold, a money pit of an investment up North, and renting an £8,000 a month Beaconsfield pile – house of cards is gonna collapse…”

Earlier this year, Leeds gained hundreds of critics by posting a video on TikTok where he extolled the virtues of ‘buying low, renting high’ in the north of England.

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