LATEST: Airbnb licensing in Scotland revised after landlords voice concerns

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The Scottish government has revised its planned licensing scheme for short term lets after concerns were raised by the sector during a consultation earlier this year.

In February, it passed legislation designed to make it easier for local authorities to manage the short term lets market, allowing councils to establish control zones where any property operating as a short term let for more than 28 days a year would need planning consent.

It also announced plans to introduce a mandatory licensing scheme.

Social Justice Secretary Shona Robison has now outlined changes ahead of laying the licensing legislation in the Scottish Parliament next month.

These include the removal of overprovision powers, a simplification of the way that neighbours are notified about licence applications, reducing public liability insurance requirements, and removing personal names from the public register.

Revised guidance will be developed with stakeholders, with an emphasis on a risk-based, intelligence-led approach to property inspections as well as keeping costs and fees under control, says Robison.

“Following our recent consultation and engagement with stakeholders, we are making some pragmatic and significant changes to improve the proposed legislation. We are therefore addressing issues raised by stakeholders whilst still allowing licensing authorities to ensure short-term lets are safe and address issues faced by neighbours.”

Onerous bureaucracy

She adds: “This means local authorities can respond to the needs and concerns of local communities and neighbours to short-term lets without imposing onerous bureaucracy on responsible tourism businesses.”

Shomik Panda, director general of the Short Term Accommodation Association, says it welcomes the decision.

He adds: “We believe that the changes that the Scottish government has announced today are a positive step in the right direction, although we will continue to push for further improvements for our members, including a grandfathering provision and auto-renewals of licences. We look forward to continued engagement in Scotland, to build the best set of regulations that we can for all.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Airbnb licensing in Scotland revised after landlords voice concerns | LandlordZONE.

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Will empty retail and office space lead to the next economic crisis?

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Commercial real estate is in trouble, there is no doubt about that. What shops are letting are attracting rents of as low as 50 per cent of what they were pre pandemic. Office space is being reduced and some companies are failing to renew leases as homeworking looks like becoming a permanent feature of office life.

Property crises in the past have often led to a banking crises, and alarm bells are ringing in those hallowed banking halls. The question is, have the recent signs of economic recovery in the sector been overestimated by the central banks and the financial watchdogs? Have they underestimated the threat posed by an industry that’s in danger of breaching debt covenants and with asset prices collapsing right, left and centre?

With a rather opaque market like commercial property it is impossible to assess at this stage the full extent of the damage caused by the switch to home delivery and home working. Property values are slow to reflect the new situation until leases run their course and properties come onto the open market. But surveyors are already significantly marking down rents for new lets.

One useful guide to real estate values in the commercial sectors is the price of shares in quoted real estate investment trusts and Reits. These have been substantially hit, severely affecting the value of peoples’ pensions and other investments.

Banker concerns

The Bank for International Settlements, which is the central bankers’ bank, estimates that in the UK, US, Europe and Japan the pandemic has has wiped away Reits’ cumulative valuation gains over the last five years. By comparison, the general quoted stocks on the main markets (FTSEs and S&P500) had regained all their losses within 18months.

Property deals are falling out of bed, property companies are trying to raise new money in the corporate bond markets and are tapping their unused bank facilities. Industry experts openly admit that many commercial properties in the US and UK are now worth less than the debt that was used to buy them, and delinquencies similar to the levels experienced in the 2008 financial crisis, particularly in the US, are beginning to escalate.

The longer the pandemic goes on with travel, hotels, retailers and office work severely affected the more the financiers worry that the resulting widespread value downgrades, defaults and eventual foreclosures could spill over into the general economy.

Major UK retailers like Marks and Spencer, which announced 7,000 job cuts in August, are busy closing loss making stores. In the US and UK many household retailing names such as Brooks Brothers and Debenhams have also fallen into bankruptcy, hastened by the growth of Amazon and other online suppliers.

There are lots of large corporate entities across the world currently looking at the impact home working, or partial homeworking, will have on their future needs for office space. A massive rationalisation programme is underway by many corporates aiming to make offices safe work spaces while reducing overall space requirements.

Government support

Requests for public support for the commercial property sector fall largely on deaf ears in Government, no doubt because hand-outs to big business are pretty unpopular with the general public. One industry expert at Colliers International, speaking about the Government’s accelerated Towns Fund says:

“The current Government funding will barely provide enough for a new bus stop for those 101 towns that are selected to receive between £500k-£1million to spend on projects in their areas. The figure needed is more like £96million per town. If the Government has such a vested interest in regeneration and transport, it needs to look at the wider picture and all financial instruments available to local councils.”

A major problem is no one yet knows how long the crisis in the commercial real estate sector will last. Business travel could take 12 months or more to pick up again, leaving hotels in limbo, though many are now housing asylum seekers. Office leases are sheltering landlords from the full effects of the downturn — offices tend to have long leases — and there’s much uncertainty around high streets, with some looking decidedly healthy while others totally forlorn.

So, what of the opportunities?

In this economic climate the need to change and adapt commercial space one way or another – repurposing as the industry terminology would have it, in other words adapting or re-using space – is likely to be a long-term saviour of the industry. It’s about adding value to what could otherwise be obsolete properties, certainly properties with little or no occupier demand.

This is not a new concept by any means: developers have been spotting opportunities to re-purpose existing buildings for ever, but an important caveat here is that the full effects of the pandemic, the way the cards will fall as things return to normal, it still difficult to predict.

With the wider economy and Brexit in the mix, it’s hard for anyone to see what’s going to be in demand in a give locality and some properties won’t suite alternative uses. However, where there are opportunities for adapting buildings, the conversion can be used to incorporate advances in technology and green environmental considerations.

Relaxed planning rules on conversions

Relaxation of the planning rules mean that from the 1st of August this year developers are allowed to convert a wide range of business premises into residential apartments and flats.

Office to residential conversions are already allowed under permitted development rights (PDR), but as from 1st August these rights were extended to include Covid hit vacant shops, restaurants and gyms.

There are of course some safeguards. To be eligible for these conversion rights, developer’s proposals must meet specific limitations and conditions set in the legislation. In some cases a prior approval application is required and even where a scheme meets all the PDR criteria developers can ensure that a scheme is lawful by applying to the planning authority for a lawful development certificate (LDC). In all cases initial consultations with local planners is essential.

However, a recent study by insurers Zurich UK warns that some of these conversations could lead to poor quality housing if the quality is not properly controlled. Office and industrial conversions can be tricky when trying to meet recognised residential space requirements, and they may be vulnerable to overheating in summer.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Will empty retail and office space lead to the next economic crisis? | LandlordZONE.

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Former Tory housing minister James Brokenshire dies after battle with cancer

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James Brokenshire, a former housing minister in the Theresa May’s government, has died after a long battle with cancer.

He served as Secretary of State for Housing, Communities and Local Government from 2018 to 2019.

The 53-year-old was best known for championing the Tenant Fees Act and steering it successfully through parliament.

“James died peacefully at Darent Valley Hospital yesterday evening with family members by his bedside. He had been in hospital since Sunday after his condition rapidly deteriorated,” a statement from his family says.

Brilliant minister

“James was not only a brilliant government minister as both Security and Immigration minister at the Home Office and secretary of state at the Northern Ireland Office and Ministry for Housing, Communities & Local Government, but a dedicated constituency MP.

“But most importantly, he was a loving father to his three children, a devoted husband to Cathy and a faithful friend to so many.”
Brokenshire was diagnosed with early-stage lung cancer in December 2017. He had his right lung removed in January this year, more recently stepping down from his role as a security minister.

He is survived by his wife Catherine and his two daughters and a son.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Former Tory housing minister James Brokenshire dies after battle with cancer | LandlordZONE.

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Six agents excluded from The Property Ombudsman

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Between July and September (inclusive), six agents were excluded from The Property Ombudsman (TPO) for failing to pay compensatory awards.

The excluded agents include:

• Ivory and Hatton, a sales and lettings agent in Canary Wharf

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LATEST: Scots landlords face new EPC rules but up to £15,000 to pay for upgrades

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Scottish landlords have until 2028 to meet energy efficiency standards but can access interest-free loans of up to £15,000 to help them spread the cost.

The Scottish government has published its Heat In Building Strategy setting out that, by 2030, greenhouse gas emissions from homes and buildings must be 68% lower than they were in 2020.

It had been committed to introducing regulations to ensure properties in the private rented sector reach an EPC D by 2025, but now aims to introduce regulations in 2025, requiring them to reach a minimum standard equivalent to EPC C, “where technically feasible and cost-effective”, at change of tenancy, with a backstop of 2028 for all remaining existing properties. All private homes will have to reach that standard by 2033.

The government will continue to offer interest-free loans through Home Energy Scotland, with a commitment to run a cashback scheme, or a grant replacement, until at least 2023, with a further grant scheme to follow.

£1.8 billion

Green MSP and Minister for Zero Carbon Buildings, Active Travel and Tenants’ Rights, Patrick Harvie (main pic), promised to invest at least £1.8 billion in heat and energy efficiency projects across Scotland.

But he told MSPs: “We estimate the total investment that will be required to transform homes and buildings across the country to be in excess of £33 billion. We are establishing a new green heat finance task force to identify innovative solutions to maximise private sector investment and find new ways to help to spread the up-front cost of making properties warmer, greener and more energy efficient.”

Daryl McIntosh (picutred), policy manager at Propertymark, says the strategy leaves some previously discussed questions unanswered. He adds: “What’s lacking is detail on the availability of financial support landlords and homeowners can expect to receive.

“There is no mention of a cost cap which was previously discussed. Any new regulations must avoid the unintended consequence of landlords leaving the private rented sector, at a time when they are most needed.”

Read about England’s green homes grants.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Scots landlords face new EPC rules but up to £15,000 to pay for upgrades | LandlordZONE.

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Six benefits of using property management software

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The world of property management has changed, just like every other area of business.

If you have a property you are looking to rent out, consider using a property management system. The need for property management software is becoming ever more pressing as it evolves into the most effective way to let, manage and maintain your assets.

A property management system is a convenient substitute for the conventional tenant hunt. It always takes some time to find a trustworthy tenant with a decent background.

Landlords used to rely on word of mouth or their own limited to discover the authenticity of a tenant. Now, all this hard work is replaced with simple clicks within property management software.

There are many ways property management software can help you. Read on to find out:

1. Find the best tenants

A good property management system lets you upload your listing and promote it to the target audience that you want in your house. Property management software increases your visibility to the relevant prospect, thereby increasing your chances of attracting high-quality applicants.

2. Manage a portfolio

As a landlord, you might have one property for letting or a portfolio of properties. In any case, it is wise to choose a property management system where you can communicate with your tenants and receive payments online as a one-window solution to all your needs.

The cost of managing a portfolio becomes significant when you have several properties to let. It becomes tedious, and chances of forgetting tenant rent arrears also increase.

It would make sense to make files of all tenants and hire a manager to oversee all the matters – fifty years ago. But today, you only need to use property management software to carry out all these tasks flawlessly and without asking for vacation or medical benefits.

3. High visibility

When understanding the need for property software, remember that good property management software goes the extra mile to make your listing visible to the maximum number of prospects possible.

While it is important that your listing has a good set of photos, a clear description, and any easy method to communicate further, it is also essential that the property management software you are using is promoting you on other websites too.
For example, ePropertys is a property management software partnered with Zoopla, PrimeLocation, and Rightmove. Your listing gets guaranteed visibility because these websites have over 170 million visitors every month on average.

4. Maintenance management

It’s inconvenient to answer phone calls from dozens of tenants making complaints or requesting maintenance work if you have a portfolio of lettings.

You don’t want to receive texts on your phone all day long too. One of the advantages of using property management software is that it allows you to communicate with your tenants with an inbox of your own on the system.

This helps landlords check maintenance issues at their convenience and record all the communication with every tenant for future use.

5. Certificates and regulations

Landlords are often stressed by the need to comply with regulations including gas and electricity safety certificates. Property management software can help you arrange and help keep an overall on compliance.

ePropertys extends its services beyond the listings contracts and payments to include gas and electricity certificates, automated reminders to ensure compliance with regulations, organise photos, chase arrears, and arrange viewings.

6. Cost saving

Even though property management systems charge a fee to manage the portfolio for you, it is still not expensive compared to the cost and time of doing it without one.

The reason is that the cost to manage incidents physically, time to consolidate accounts, and the effort for proper capital planning, are all saved by using a property management system.

The system also helps to improve customer satisfaction, which means that the tenant turnover will be reduced. Longer-term contracts with tenants save costs of finding new tenants and renovating every time you rent your lettings to someone new.

Using a property management system is the best way to manage your properties. Even landlords with limited computer literacy are shifting to property management systems because they are convenient and cost-efficient and remove many hassles for the landlord.

ePropertys allows landlords to upload listings using a certain service package and facilitates them to advertise their listings to get immediate results. ePropertys doesn’t take a fee until the property is let, which means landlords are not taking any risks financially. Therefore, ePropertys is often recommended by landlords to their friends and acquaintances. They sign up saying they have heard about the website from a friend; this goes the same for tenants.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Six benefits of using property management software | LandlordZONE.

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Refinancing a modest but thorny commercial mortgage?

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Hello fellow P118’s – I wonder, can anybody help with a thorny little problem that we have?

We need to refinance a modest (just over £500K) mortgage for a small office building that we own as a part of our pension.

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