CAMPAIGNING Danny Butcher foundation donates cash to homelessness charity

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The trust set up in the memory of Danny Butcher, the former army reservist who took his own life after getting into debt after attending a Samuel Leeds ‘financial freedom’ course, has donated its first funds to charity.

Butcher’s father Alan (pictured), who runs the foundation with the help of family and supporters, says the problem of homelessness in particular among former services personnel was close to his son’s heart.

“When Danny attended the course run by Samuel Leeds he wanted to both improve his own financial position so he and his partner could lead a better life, but also said any spare cash his property investments generated would be donated to homelessness and armed forces charities,” he tells LandlordZONE.

His son, who was already in financial difficulty, borrowed £13,000 to attend a Samuel Leeds course.

“That’s why we’ve begun fund raising via the foundation and so far we’ve raised £3,000 with the first tranche of £500 going to Help 4 Homeless Veterans charity.”

Donate to the foundation here.

Danny Butcher’s desire to end his financial problems by following Leeds’ investment advice didn’t pan out as he had hoped and the then 37-year-old instead sank further into debt.

“He stood in my kitchen and told me he’d made a mess of everything but I told him we’d get through it together,” says Alan. “But I could tell something had changed within him.”

Guru regulation

The Danny Butcher Foundation is campaigning for ‘property gurus’ such as Leeds to be regulated to protect inexperienced and vulnerable people like Butcher, and has launched a petition.

“Over the last 15 years, the ‘wealth creation/property training’ market has grown to become a multi-million pound market with little regulatory oversight,” the foundation says.

“This lack of regulation has created an opportunity for unscrupulous individuals to run rampant.

“Significant numbers of people are being pushed into debt after having been sold an expensive dream of easy riches. Many more find themselves in a worse financial situation than before they signed up to the expensive ‘training’.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – CAMPAIGNING Danny Butcher foundation donates cash to homelessness charity | LandlordZONE.

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REVEALED: What are the UK political parties’ key private rented sector policies?

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Which way is the political wind blowing for landlords? Ahead of tomorrow’s local and regional elections, we take a look at the main political parties’ policies and their plans for the PRS.

Conservatives

The Conservatives have famously declared they want to turn Generation Rent into Generation Buy – evidenced by the government’s mortgage guarantee scheme announced  in the last Budget.

They are backing the introduction of the Renters’ Reform Bill and plan to remove section 21 ‘no fault’ evictions. In London, Conservative candidate Shaun Bailey has announced he wants, “more homeowners and fewer private landlords”. He wants to build 100,000 shared ownership homes available for £100,000, requiring only a £5,000 deposit.

Greens

The Greens believe assured shorthold tenancies should be phased out and replaced with a new stable rental tenancy. They have also called for the abolition of section 21 and rent controls to achieve a living rent.

To tackle rogue and slum landlords, the Green Party would simplify and toughen up the Housing Health and Safety Rating System, ensure local authorities dedicate adequate resources to proactively enforce it and has backed a national landlord licensing scheme.

Lib Dems

The Liberal Democrats have promised to scrap business rates altogether and replace them with a levy on landlords. It would also allow local authorities to increase council tax up to 500% where properties are being bought as second homes.

The party plans to introduce a new ‘rent to own’ model for social housing where rent payments give tenants an increasing stake in the property, so that they own it outright after 30 years. It’s also in favour of scrapping Section 21 and mandatory landlord licensing.

Plaid Cymru:

Plaid Cymru proposes a Fair Rents Bill, which would include measures such as ending ‘no-fault’ repossessions and providing tenancies of indefinite duration. It also wants to make tenancies more transferable between generations and to give councils the power to set a Living Rent rule to cap rent in rental pressure zones at a maximum of one third of local average income.

It would strengthen the powers to deal with poor landlords who don’t meet housing standards or social responsibilities, making them subject to annual vetting and being struck off if they fail to comply.

Labour

In London, Sadiq Khan has pledged to build 10,000 more council homes, as well as to explore a possible new fund to help local authorities buy back homes sold under the Right to Buy. He has also called for rent controls in the capital. In Manchester, Andy Burnham announced a £1.5m ‘good landlords scheme’ aimed at driving up standards in the private rented sector, and a long-term homelessness prevention strategy.

Labour wants to scrap Right to Rent, to introduce nationwide landlord licensing and ban discrimination against housing benefit tenants. It has pushed for the abolition of Section 21. It would also give councils new powers to regulate short-term lets through companies such as Airbnb.

SNP

The SNP has promised to deliver 100,000 affordable homes over the next decade, tackle high rents and increase stability for those in the private rented sector and to give local authorities the tools they need to improve access to housing in their local areas.

The party plans to improve accessibility, affordability and standards across the whole rented sector, publishing a new Rented Sector Strategy, informed by tenants, and would bring forward a new Housing Bill to strengthen tenants’ rights and improve the housing rights of people experiencing domestic abuse. A new Housing Standard would cover all new and existing homes.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – REVEALED: What are the UK political parties’ key private rented sector policies? | LandlordZONE.

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HM Treasury warns tenants Breathing Space debt scheme is not ‘rent payment holiday’

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Tenants have been warned they need to continue paying rent and bills while taking part in the new Breathing Space scheme – or their debt advisor can cancel it.

Although interest and fees are frozen, the government says it’s not a payment holiday and that anyone entering a Breathing Space has to keep up payments while they work to find a debt solution and access professional advice.

Housing law experts have also warned that the scheme isn’t a free ride for defaulting tenants, who have 60 days to get their finances back on track. Most debts will qualify, including rent arrears and Universal Credit overpayments.

If a tenant has successfully applied to the scheme, landlords have to put any action they’re taking in relation to the rent arrears (including court action) on hold for as long as the Breathing Space lasts.

Section 8

A Section 8 notice can’t be issued for rent arrears but can on any other available grounds. In a late move last week, the government announced that both landlords, agents and their solicitors will now have to include details of the scheme within paperwork when seeking to gain possession of a property, or risk the eviction being rejected.

New guidance

The Insolvency Service has also issued new guidance explaining that rent arrears on joint tenancies can be included in a Breathing Space, even if only one of the tenants goes into the scheme.

The joint debt would become a Breathing Space debt, and the protection from enforcement action would apply to both parties. Creditors could still charge the other person interest or fees and the Breathing Space wouldn’t affect the other person’s debts and liabilities in their own name.

The scheme is set to help about 700,000 people this year who are struggling with problem debt.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – HM Treasury warns tenants Breathing Space debt scheme is not ‘rent payment holiday’ | LandlordZONE.

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Car parking giant in survival bid to reduce rent bill

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The pandemic has had a dramatic effect on property usage, not least on the demand of in-town parking spaces.

NCP’s revenues have fallen by around 80% during the pandemic as, according to a company spokesperson, many town and city centres and urban train stations are unlikely to fully recover their pre-pandemic footfall.

A combination of declining high streets, uncertainty of the future volume of office traffic as people experience increased flexible working, and the rapid growth of home delivery, means that some locations may become unviable.

NCP is not the only company struggling to keep to its lease commitments in the UK and is not the only one to seek to use a new court procedure to help it restructure and cut costs. A court case in London is currently ongoing which will shortly rule on a similar plan to that proposed by NCP, brought by the nationwide gym operator, Virgin Active.

The Corporate Insolvency and Governance Act, which received Royal Assent on 25 June last year, contains a new Restructuring Plan process known as “the super scheme”.

The first such restructuring plan was used in the financial restructuring of Virgin Atlantic Airways (VAA). It is said to represent a new landmark in the UK for company restructuring, sanctioned by the High Court.

The Plan is a tool which has the potential to change the way many UK restructurings are implemented by moving UK restructuring processes and procedures closer to a US “Chapter 11” type of model.

The new plan is developed from the Scheme of Arrangement under Part 26 of the Companies Act 2006 (Scheme), but the Plan is a more flexible court supervised arrangement, a restructuring process that will likely be welcomed by many struggling companies.

New proposal

NCP has failed to reach an agreement with all its landlords, but the company says it has received “significant support” from its creditors and estimates that at least 85% of its A1 landlords will back the new proposal.

The first court hearing on the NCP restructuring plan case, the procedure to help the struggling firms reduce their liabilities, even without support from a majority of creditors, is due to take place on the 28^th of May.

The restructuring, says NCP, is necessary to avoid insolvency, as the company battles to recover from the Covid pandemic. Major shareholder Park24 Co., Ltd. has threatened to cease funding the business if the restructuring attempt fails, according company sources.

Following workforce cuts and taking government support through the various schemes, the company says that if the plan is approved it will retain its existing management to implement the recovery plan by reducing rents and closing down unprofitable parking facilities.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Car parking giant in survival bid to reduce rent bill | LandlordZONE.

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YOUR forum questions answered: Why is my flood insurance going up?

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The hugely popular LandlordZONE forum is a friendly community where landlords share their experiences, exchange tips and ask for advice. Here we answer a recent question and ask the experts at Hamilton Fraser to give their best answer.

The issue:

A landlord’s insurance company has decided that their property’s flood risk has increased, despite it being in an area with a low probability of flooding. They want to know why their premium and excess on any flooding claim have gone up.

The answer:

Steve Barnes (pictured), Associate Director at LandlordZONE insurance partner, Hamilton Fraser Total Landlord Insurance, offers an explanation.

“Although it’s not possible to comment on this particular case without knowing the specific details of the property, there are a number of reasons why this landlord’s premium and excess may have increased, despite no apparent change in flood risk,” he says.

Flood data

“Insurance companies rely on a range of data to inform their long-term risk management, including climate change analytics to assess future flood risk, and flood mapping.

“Lots of insurers will be working off the same data and therefore it’s likely that they will make comparable decisions when it comes to assessing the flood risk of a property. However, with forward planning and a clear checklist of what you’re looking for, you should still be able to find protective, competitive cover that meets all your insurance needs as a landlord.

More storms

“Flooding has always been a substantial risk for certain parts of the UK, and it can happen anywhere, not just in riverside locations. For example, torrential rain, burst water mains and backed-up sewers can result in surface water that can flood properties and make them completely uninhabitable. But an influx of named storms in recent times has further impacted insurers’ risk appetite and ultimately the cover they are willing to provide.

“Last year saw 10 named storms, doubling the 2019 figure of five. At Hamilton Fraser Total Landlord Insurance, we experienced a 95 per cent increase in storm claims compared to the previous year. In one recent case, we paid out £143,755 for a claim where a major flood caused by Storm Desmond had caused extensive damage to a property.

“In 2020, storms Dennis and Ciara alone resulted in an estimated cost of over £500 million to insurers. This dramatic rise in claims is one of the primary reasons landlord insurance providers are increasing their premiums.

With extreme weather events increasing steadily over recent years, it’s vital for landlords to not only do as much as possible to prevent flooding in the first place, but to ensure they’re properly covered too.

“Hamilton Fraser Total Landlord Insurance is signed up to the Flood Re scheme, which will cover buy to let properties as long as they meet the criteria outlined here. The scheme raises funds to cover flood risks in insurance policies and reimburses the insurer after a paid claim is made, helping to keep premiums down.

Hardening market

“Another reason why this landlord’s premium and excess have increased could be to do with the fact that the insurance market is currently hardening. After several years of a ‘soft’ market with competitive premiums, relaxed criteria and wider cover, premiums and excesses are now going up. In a hardening market, it’s particularly important to make sure you’re fully protected.

“In our recent article, Six risks in a hardening market and how to avoid them, we provide a more detailed explanation of what landlords can do to avoid hefty pay-outs in a hardening market.

“For example, you can sometimes reduce your premiums by increasing your excess, without affecting your level of cover – an option which might make sense if you rarely make a claim. Or, if the excess is already very high, as in this case, you might be able to shop around for a more competitive provider.

“However, while a soft market offers landlords a wide range of choice, in a hardening market, insurance options are fewer as some insurers mitigate their risks by pulling out of the market altogether, leaving fewer quote options.

“It’s important to emphasise that, in the current climate of a hardening market, landlords should be careful not to leave insurance renewals to the last minute, as you may find your provider is no longer offering a policy which is good value for money and suits your needs.”

Listen in

You can listen to Steve Barnes discussing the causes of the current hardening insurance market, what landlords can do to mitigate any problems with their portfolio and how to get the best value for money, in the latest episode of Hamilton Fraser’s Property Podcast, ‘Caught between a rock and a hardening insurance market’.

To ensure you get insurance which adequately covers you for all eventualities, follow the Hamilton Fraser Total Landlord Insurance checklist, which you can find at the end of our article on the hardening insurance market.

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. 

Hamilton Fraser supports landlords, letting agents and tenants by offering a range of solutions and thought leadership to help them navigate the private rented sector. Most recognised in the private rented sector for providing award winning landlord insurance, the Hamilton Fraser family includes Total Landlord Insurance, mydeposits, the Property Redress Scheme, Client Money Protect, Landlord Action, Ome, HF Assist and Total Landlord Mortgages.

Join LandlordZONE’s forum here.

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Fix Universal Credit housing payments once and for all, says leading trade association

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The Department of Work and Pensions (DWP) has been criticised once again for the way it pays Universal Credit (UC) direct to tenants and in arrears, causing problems for landlords.

Property industry trade association ARLA Propertymark says paying UC in arrears makes it impossible for many tenants to pay their rent on time and that it is time the government ensures “UC is adequate and more effective”.

Its comments, which are unusually forthright for an organisation that is not usually keen to publicly challenge government policy and performance, follows last month’s Equality Act 2010 court win for Shelter.

It secured damages of £4,500 plus costs for house hunter Hayleigh Pearce, who was told by Brighton letting agency Michael Jones & Company that she could not view a property because she was in receipt of benefits.

UC problems

Propertymark says the problem is not so much the blanket ‘No DSS’ bans operated by some agencies, but the reluctance of landlords to get involved in the often labyrinthine UC payments system.

As LandlordZONE has reported many times in the past, landlords struggle to persuade the DWP to pay UC’s housing element direct to them even when the tenant is co-operative, and that tenants spend their housing element before it can be passed to their landlord, leading to rent arrears.

“ARLA Propertymark is a member of the DWP Universal Credit Private Rented Sector Strategic Landlord Group and has worked hard to lobby for change to improve how Universal Credit works in the private rented sector,” a statement says.

The organisation is calling for direct payments to landlords to be made easier to organise, for payments to be more flexible to help tenants budget, and that tenants should not have to wait five weeks to get their first UC rental payment.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Fix Universal Credit housing payments once and for all, says leading trade association | LandlordZONE.

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Government predict 700,000 will use Breathing Space scheme

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People in England and Wales struggling to pay debts or rent could be eligible to use the Breathing Space scheme, and Government expects around 700,000 people to benefit in the first year of the scheme.

Creditors (landlords) are not allowed to contact tenants directly to request payment of the debt or take enforcement action to recover the debt (including by taking possession of a property) for a maximum of 60 days.

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LATEST: Landlords and housing campaigners unite to slam government over LHA rent freeze

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Landlord groups and housing charities have united to denounce the recent local housing allowance (LHA) freeze.

The benefit was frozen despite widespread rising rents, which will leave tenants in some parts of the country facing a shortfall of more than £100 a month, says Shelter.

Chief executive Polly Neate believes housing benefit should be there as a safety net to protect people who’ve hit rock bottom, and if it’s not fit for purpose, homelessness will rise. 

She adds: “The government can step in and keep more people safe in their homes, by reversing the freeze on housing benefit. Without this, a rising tide of homelessness could be the legacy of the pandemic.”

The National Residential Landlords Association says the pandemic has highlighted the need for a welfare system that provides tenants and landlords with confidence that benefit payments will cover rents.

A spokesman tells LandlordZONE: “For this reason, we strongly oppose the Chancellor’s decision to freeze the Local Housing Allowance in cash terms.

“It will serve only to make it more difficult to sustain tenancies. The Chancellor should think again and, at the very least, restore the allowance to the 30th percentile and preferable ensure it covers average rents in any given area.”  

However, rental agency Pick My Pad reckons that despite the freeze, many tenants on benefits are in a position to cover their rental costs. 

CEO Mish Liyanage says that in Manchester, the LHA rate is £138.08 per week for a one-bed property while the average private rent is £120 a week. He adds: “An agent can secure a higher rate per week eligible for the DSS tenant, vet the tenants, and get a non-cash damage bond on your behalf.”

Read more about Shelter.

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Leaseholder bringing his own builder in to quote?

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We are a small group of leaseholders who are also shareholders in the management company that owns the freehold to our flats. I recently took over from the chap who ran the management company as he sold his flat and nobody else wanted to do it.

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Lease and repair issues – I may need profession help?

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This is a tricky one – we are a newish development (old offices) of 3 new floors and one existing (residential) on the 4th floor. The 4th floor lease has a clause that excludes them from 1st works to the roof as it was to be provided in good order.

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