Private renters in arrears doubles during the pandemic according to Government data

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The number of private renters in arrears in England has more than doubled during the pandemic, according to new government data.

The latest Household Resilience Study shows that in April-May, 7% of private renters were in arrears, up from 3% in 2019/20, amounting to more than 780,000 renters. Another 9% expect to fall behind with their rents over the next 12 months, despite private rents having fallen in real terms.

Rising bills

With more than a quarter (27%) of private renters having reported difficulties in meeting their heating costs in the same period, the National Residential Landlords Association has warned that with rising bills now adding to their burden, many renters will struggle to pay off Covid-related rent debts.

Chief executive Ben Beadle says that without a targeted package of support, many tenants run the risk of losing their homes needlessly. “The Chancellor needs to address this crisis,” he adds. “His continued failure to act signals to the private rented sector that the government simply does not care about the problem.”

Meanwhile, the Joseph Rowntree Foundation has urged Housing Secretary Michael Gove to make ambitious investment in social housing a key part of his strategy to fix the housing crisis after it found that 956,000 families in England are paying rents they can’t afford in the private rented sector. 

Adverse effects

Both findings come as a Shelter poll reveals the pandemic’s adverse affect on private renters’ mental health: 39% say their housing problems or worries have left them feeling stressed and anxious, 22% say these made them physically sick and 21% report that the problems have negatively affected their performance at work. The charity’s YouGov poll finds the most common problems plaguing renters’ mental and physical health include damp and mould – which affects 26% of all renters – being unable to heat their home (26%), constantly struggling to pay rent (21%) and fear of eviction (19%). 

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Private renters in arrears doubles during the pandemic according to Government data | LandlordZONE.

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Rents outside London rising at fastest ever rate recorded by Rightmove

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High demand and properties being let out quickly has led to rents outside London rising at the fastest rate ever recorded by Rightmove, up by 8.6% on a year ago.

As tenants return to urban living, a number of cities across Great Britain have seen double digit growth in rents after a year of falls. In Bristol, Nottingham and Glasgow, rents are now more than 10% higher than pre-pandemic levels, while London has also started to recover, with rents up 2.7% on a year ago.

Rightmove’s Quarterly Rental Trends Tracker reports that total rental demand is now up by 39% compared with the same time in 2019, and up by 11% compared with a strong September last year. This demand has led to properties being snapped up at the quickest rate ever recorded, at 17 days.

Bouncing back

The available stock shortage is most pronounced in suburban and rural areas, which has led to a shift in the make-up of total available properties on Rightmove where 64% of them are now in urban locations, up from 48% pre-pandemic. Meanwhile, competition among tenants for flats is up by almost double (+95%) that of a year ago, the biggest jump of any property type, with three and four bed flats seeing the hottest competition.

Rightmove’s director of property data, Tim Bannister, says as society has opened up again, cities have not only bounced back but we are also now seeing strong rental growth, fuelled by increased tenant demand and limited available stock. He adds: “It’s still easier to secure a place in a city centre than in some of the hottest suburban and rural rental markets right now, but as more tenants boomerang back to busier locations this is likely to change.” 

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INTERVIEW: secret of 47 years success is ‘vetting and gut instinct’

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Few landlords can boast of having the same tenants they started out with, but some of Marion Money’s tenants have been with her since 1974.

Marion comes from a landlording family in Kent and recalls that rent controls and sitting tenants meant few people were investing in the PRS during the ‘70s. However, she saw the potential for buying older properties and converting them, and has steadily grown her portfolio of commercial and domestic properties since then. Marion puts her success and longevity down to careful vetting as well as using gut instinct; she often finds new tenants through word of mouth and has ended up with extended families in a number of her properties who appreciate having a reliable, caring landlord – and one who happily accepts pets.

Marion has been lucky in that she’s only had two tenants in difficulty during Covid; one has since started paying full rent again and she has been helping out the other. Under Housing Benefit rules, the tenant was supposed to move into a bedsit but Marion has told him he can stay in his flat. “He has children who wouldn’t have been able to stay with him if he’d moved, so I thought he would be in a better place mentally to remain where he is, so I’ve just decided to take a hit on the benefit,” she tells LandlordZONE.

Complex business

Marion has represented the National Residential Landlords Association in the South East since 2007 when she started liaising with local councils. “One told me that before speaking to me, they’d never met a good landlord because they’d always dealt with rogue ones,” she says. “Since then, I’ve helped introduce lots of good landlords to councils and given them the confidence that landlords are doing their best to comply with regulations, and it’s been great to see relationships develop.” She adds: “Being a landlord is a complex business, but I can help them keep up with the legislation.” 

Marion is now keen to get face-to-face meetings going again, as well as supporting landlords who have expressed an interest in helping resettle Afghan refugees. Meanwhile, she is happy to continue managing her portfolio and has no plans to expand, adding: “My next decision will probably be about how we get the next generation more involved in our business.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – INTERVIEW: secret of 47 years success is ‘vetting and gut instinct’ | LandlordZONE.

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Shelter poll claims 22% of renters health is being harmed by poor housing

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A new YouGov poll commissioned by Shelter report claims the health of 22% of renters in England is being harmed by poor housing, with the most common problems plaguing renters’ mental and physical health.

They include damp and mould

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Good landlords should pay lower Rent Repayment Order awards, says judge

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An Upper Tribunal has ruled that Rent Repayment Orders are to be made on a sliding scale of a landlord’s ‘badness of behaviour’.

It has only awarded 80% of the rent to six former tenants who lived in an unlicensed HMO with two category 1 hazards of fire safety and excessive cold, where one of the bedrooms was too small under the licensing scheme.

The court over-ruled a First Tier Tribunal that had awarded the tenants 100% of rent, minus an amount for utilities costs, after the landlord, Amanda Williams, appealed.

Describing herself as a ‘professional landlord’ with a ‘modest portfolio’ of properties, she applied for a licence in February 2020 on the property in Afghan Road, London, shortly before the tenants left in March 2020, but the application was rejected based on the room size and the lack of remedial works. 

The Upper Tribunal judge ruled: “If a landlord has not previously been convicted of a relevant offence, and if their conduct, though serious, is less serious than many other offences of that type, or if the conduct of the tenant is reprehensible in some way, the amount of the RRO may appropriately be less than the maximum amount for an order.” 

Serious cases

Giles Peaker, partner at Anthony Gold Solicitors, tells LandlordZONE that since 2020 the starting point for payments has been 100% of the rent, but that would now only be for the most serious cases. For those whose landlord has just simply not licenced a property it could mean they might only get much less.

“It will mean more uncertainty for tenants until there’s been a few more appeals and you might see a battle about who has behaved worse – landlords or tenants,” he says.

“There will be a lot of variation in FTT decisions, and doubtless a lot of appeals, by landlords trying to argue that although their behaviour was quite bad, it wasn’t all that bad, and tenants arguing that their landlord’s behaviour should properly be regarded as atrocious.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Good landlords should pay lower Rent Repayment Order awards, says judge | LandlordZONE.

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Rent Repayment Orders to be made on a sliding scale of landlords ‘badness of behaviour’ tribunal rules

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An Upper Tribunal has ruled that Rent Repayment Orders are to be made on a sliding scale of a landlord’s ‘badness of behaviour’.

It has only awarded 80% of the rent to six former tenants who lived in an unlicensed HMO with two category 1 hazards of fire safety and excessive cold, where one of the bedrooms was too small under the licensing scheme. The court over-ruled a First Tier Tribunal that had awarded the tenants 100% of rent, minus an amount for utilities costs, after the landlord, Amanda Williams, appealed.

Describing herself as a ‘professional landlord’ with a ‘modest portfolio’ of properties, she applied for a licence in February 2020 on the property in Afghan Road, London, shortly before the tenants left in March 2020, but the application was rejected based on the room size and the lack of remedial works. 

The Upper Tribunal judge ruled: “If a landlord has not previously been convicted of a relevant offence, and if their conduct, though serious, is less serious than many other offences of that type, or if the conduct of the tenant is reprehensible in some way, the amount of the RRO may appropriately be less than the maximum amount for an order.” 

Serious cases

Giles Peaker, partner at Anthony Gold Solicitors, tells LandlordZONE that since 2020 the starting point for payments has been 100% of the rent, but that would now only be for the most serious cases. For those whose landlord has just simply not licenced a property it could mean they might only get much less. “It will mean more uncertainty for tenants until there’s been a few more appeals and you might see a battle about who has behaved worse – landlords or tenants,” he says.

“There will be a lot of variation in FTT decisions, and doubtless a lot of appeals, by landlords trying to argue that although their behaviour was quite bad, it wasn’t all that bad, and tenants arguing that their landlord’s behaviour should properly be regarded as atrocious.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Rent Repayment Orders to be made on a sliding scale of landlords ‘badness of behaviour’ tribunal rules | LandlordZONE.

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Research reveals impact on private rental sector due to Brexit and Covid related travel bans

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The number of prospective tenants in the capital has now surpassed the number of properties available to rent, according to the latest Propertymark research.

An average of just 126 properties are currently managed per branch in London, significantly lower than the national average of 196, while there has been a continual increase in the number of London-based prospective tenants, growing from 98 per letting agent branch in June 2020 to 148 during August 2021. 

Supply and demand

This increasing gap between rental stock supply and demand is largely due to the knock-on impact of Brexit and Covid-related travel bans, with about 10% of the population leaving London in 2020. Many short-term letting agreements switched to long term rentals in that time, creating extra stock in London as demand was falling. This has resulted in a drop in rental value by as much as 30%.

Greg Tsuman, lettings director of Martyn Gerrard Estate Agents, says Section 24 changes and extra stamp duty on second homes has meant that landlords are paying more tax than ever before, while the pending changes to energy efficiency rules will also bring further costs to landlords. He adds: “As a direct result we expect rents to climb. To stop this trend, and for landlords to return to the London private rented sector, the UK government needs to review its tax policies for landlords and introduce policies that support investment in the sector.”

The capital’s short-term rental sector is continuing to perform very strongly, according to the latest tracking data from STR and the UK Short Term Accommodation Association. Short term rentals averaged 71.2% occupancy for August – an uplift of 4.2% in July and 36.9% up year-on-year. Short-term rentals are also achieving better rates than hotels and serviced apartments at £138.20, down 6.2% in July but up 12.3% year-on-year.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Research reveals impact on private rental sector due to Brexit and Covid related travel bans | LandlordZONE.

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Sell your Property Portfolio before Christmas – All your properties sold in just 9 days!

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With just 10 weeks to go until Christmas, and the property market at a record high, it’s no wonder landlords are choosing this year as the year to sell their property portfolios, cash in and retire. And they’re bang on the money;

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Landlord seeks to recover all money owed after property scheme agent fails to pay £150,000 in rent

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The Property Redress Scheme has expelled a guaranteed rent operator after it failed to pay an eyewatering £150,000 in rent to a former landlord client.

It has been ordered to pay the landlord £25,000, the maximum it can award, and has now been removed from the scheme, while the landlord plans to try and recover the amount owed through the courts.

Financial loss

The case involved rent to rent arrangements for eight properties, which the agent struggled to fill due to the pandemic. The landlord agreed to reduce rent payments during Covid when some of the properties were empty, but the agent failed to revert to full rent when these temporary arrangements expired and the properties were occupied and sub tenants were paying rent. The agent was also found to have used an unregistered handyman following a gas leak, resulting in the landlord reporting the incident to Gas Safe and the HSE. This all amounted to a significant financial loss for the landlord.

Sean Hooker, head of redress at the Property Redress Scheme, says: “Guaranteed rent, or rent to rent, operators are becoming more and more common in the private rented sector, as it offers a lower barrier to entry into the property market. Whilst there are reputable operators who have been providing the service for many years, there is a significant proportion of the market who are less experienced and need to make sure they fully understand their obligations and responsibilities.”

Tread carefully

The Property Redress Scheme has reported a 43% increase in complaints relating to guaranteed rent since 2018 including loss of rent, damage to property and sitting tenants.

Paul Shamplina, founder of eviction specialist Landlord Action, adds: “If the rent to rent arrangement is not carried out diligently the landlord loses control of what is happening at the property and this is where the problems begin. With many years’ experience of dealing with evictions I would advise any landlords entering into such an agreement to tread very carefully.”

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Buy to Let Limited company criteria

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When setting up a Special Purpose Vehicle (SPV) for your Buy to Lets it is important to use the appropriate SIC Code. (A SIC code is a five-digit Standard Industrial Classification code. There are more than 600 individual SIC codes in the UK)

The following codes are normally accepted by lenders: 68100

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