SECTOR warned after landlord fined £20,000 over shocking fire safety breaches

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Tenants living above a takeaway were evacuated during a fire inspection as inspectors were so concerned about their welfare, a court heard.

London Fire Brigade has highlighted the case of landlord Mr Jin Zhang who was ordered to pay more than £20,000 for safety breaches in the flats he owned in New North Road, Islington (pictured).

The tenants on the first and second floors of the building could only escape via a single staircase to the takeaway, which had a metal shutter over the front when the shop was closed.

Inspectors visited the takeaway after concerns were raised by one of the tenants and then the council, particularly about the lack of a fire alarm system.

They found that fire doors had been removed on the ground floor, there was no emergency lighting and no fire alarm. The tenants were evacuated immediately and Zhang was later charged with six offences under the Regulatory Reform (Fire Safety) Order.

Assistant commissioner for fire safety Paul Jennings (pictured), says: “Although the shutter at the front of the restaurant was not locked at night, the residents would still have had to open it before being able to escape during a fire which is completely unacceptable and could easily have hindered their ability to get out quickly.

He adds: “There’s no excuse for leaving people’s safety to chance, especially when information is so readily available to those with responsibility for safety in buildings to understand what their duties are and ensure they comply with the law.”

City of London Magistrates Court fined Zhang £500 for each offence and ordered him to pay a victim surcharge of £50 and £17,335 in costs.

Read more about fire safety regulations.

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LATEST: Mortgage lending to landlords jumped by 83% this year

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The value of buy-to-let lending jumped by 83% this year to £18 billion when compared to 2020, trade association UK Finance has reported.

Its data shows the landlord market for both new purchases and remortgages rebounding strongly this year, although this hyperactivity is likely to return to more normal levels of approximately £13 billion next year and £12 billion in 2023.

But the overall growth in the buy-to-let market is highlighted by these latest figures and for example in 2010 loans totalling just £5 billion were approved for landlords, despite the additional tax and regulatory burdens they now face.

“It is true that buy-to-lets aren’t the bargain that they once were,” says Miles Robinson, Head of Mortgages at broker Trussle (pictured).

“Changes to tax and the Stamp Duty Surcharge have impacted returns, which made rental the king of investments.

“But this new data shows that property is still seen as a safe and reliable way of generating extra income. This can be both in the short term, through rent collection and long-term gains in house prices.”

Robinson reckons part of the reason for buy-to-let lending growth this year has been a surge of landlords switching to student lets.

“Student rental properties especially remain an attractive proposition for investors, with recent research revealing that student buy-to-lets consistently outpace the rest of the PRS market, by as much as 17.86% in rental yield,” he says.

“Our own research has also revealed that 66% of parents are considering purchasing a buy-to-let property near their child’s university to alleviate living costs during their studies, whilst 53% of parents would consider downsizing to help support their children through university.”

Read the UK Finance report in full.

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INTERVIEW: Legislation is hitting Welsh landlords hardest, says leading investor

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One-size-fits-all legislation is hitting Welsh landlords particularly hard, according to one of the country’s more successful property investors, who believes it’s having an irrevocable impact on the sector.

Alexlouise Thomas, who has been in the business for almost 20 years and has 14 properties in Wales, says the government is working against landlords who want to offer good quality, affordable housing.

“There’s a lot of unintended consequences to the legislation that’s being introduced, as a landlord in London is different to a landlord in Wales,” she tells LandlordZONE.

“Many Welsh landlords just don’t have the resources to become a limited company or pay for Rent Smart Wales registration. House prices and incomes are lower, rents are cheap and many of the landlords are small.”

After training as a chef, Alexlouise started investing in property aged 22 and rapidly grew a 19-strong portfolio. But while hosting cookery demonstrations, she realised she was giving diners more advice about houses than cooking, and her property education business was born – Rock Solid Moneymaker.

It’s grown into a successful mentoring scheme that focuses on financial security and has spawned joint ventures involving some of her trainees as well as an upcoming book.

Limited company

She recently transferred her property into a limited company as a way of making it more tax-efficient, but acknowledges that many smaller landlords don’t have that luxury.

And with energy efficiency targets looming, many will be hit disproportionately hard when faced with retrofit bills, says Alexlouise, while some are also getting big tax bills. “They’re realising the property isn’t making them money anymore.”

As larger joint ventures and companies can share the tax and legislative burden, the result will be fewer smaller landlords, she adds.

“It’s sad that the current climate is removing the ability for someone to build a bit of wealth by buying one property to rent out, however, it could mean it will become a more professional sector. We should now be having conversations about the solutions as well as the challenges ahead.”

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Landlords who agreed tenancies via Purplebricks could be liable for large tenant payouts

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Hi, my name is Melissa Lawford, and I am the property correspondent at The Telegraph.

I’m writing about how landlords who arranged tenancies via Purplebricks could now have to make large payouts to their tenants because they were not served necessary legal (prescribed) documents about their deposits.

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EXCLUSIVE: ‘We listened to landlords’ claims Durham selective licensing chief

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Durham has been given the green light for a huge new selective licensing scheme – although it is 40% smaller than its original plan.

The scheme will cover about 29,000 homes, 42% of the county’s private rented sector, and will go live on 1st April when landlords will need a licence to rent their properties.

Durham County Council had originally approved a scheme that covered 65% of the county and included 51,000 private rented properties but Lynn Hall, strategic manager for housing, tells LandlordZONE: “We consulted with landlords, tenants and residents on our plans for a selective licensing scheme last year.

“Having taken their feedback on board, we submitted a smaller application which was approved by cabinet in September 2020.”

This has now been signed off by the Department for Levelling Up, Housing and Communities, and the application process opens for landlords in early February. The licence fee is £500 for a five-year period, although if landlords meet certain criteria this will be cut to £350.

Good conditions

Part of the County Durham Housing Strategy 2019 to 2024, which aims to maintain and improve standards across the county’s housing stock and wider housing environment, the scheme aims to create long-term, sustainable neighbourhoods by ensuring that any privately rented properties are well managed and in good condition.

Durham County Council has already run three selective licensing schemes in Dean Bank, Ferryhill, Chilton West and Wembley in Easington Colliery, that all ended in 2019.

It has reported that these made a positive impact, with a drop in reported crime and anti-social behaviour and positive improvements in both the condition and management of private rented properties.

Councillor James Rowlandson (pictured), cabinet member for resources, investments and assets, says: “By raising the management and maintenance standards of private rented properties, we can help to improve the health and wellbeing of tenants and reduce anti-social behaviour in our communities.

It will also allow us to better support landlords and ensure they have the right tools to deliver a high standard of service in the sector.”

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Hazard Awareness Notice?

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Due to excess heat in some flats in a block (where I have a couple of units) some tenants contacted the local council who appeared and are now proposing to issue a Hazard Awareness notice (cat 1) on the Freeholders.

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It’s time to target international students

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Despite Covid the UK remains one of the most popular destinations in the world for international students and is second only to the US as a preferred choice for those seeking top-notch universities.

These students, often arriving in an unfamiliar land and still relatively young, are keen to secure decent accommodation and often armed with generous budgets with half of them beginning their search up to a year in advance.

And apart from the right price, they also seek accommodation that’s close their campus and want, particularly in their first year, bills inclusive of rent.

The opportunity

There are almost 500,000 international students studying at UK universities, hailing from countries such as China, India, USA and Nigeria, as well as our close neighbours in Europe.

A recent study by the Higher Education Policy Institute estimated that these students were worth over £20 billion to the UK economy.

Halls v houses

Often overlooked by landlords who think international students only want to live in halls, our research shows that the majority would prefer to live in shared housing.

As the number of international students visiting www.accommodationforstudents.com (AFS) to find a term-time home has risen sharply, our team has been working with landlords to encourage them to target students from overseas. There are a couple of reasons for this.

Short term challenges and long term wins

There are some shorter-term challenges right now. Covid 19 has made it more difficult for international students to get into the UK, while remote learning has encourage some to stay in their home country.

As a result, the number of international students accepting a place to study in 2021 has fallen compared to the previous year. Early evidence is that despite this drop in numbers there would actually be more students traveling to live in the UK this year, with student visa applications up over 100% this year.

But the longer term aim of the UK is to increase the number of international students studying in the UK to 600,000 over the next decade. With many anticipating a relative return to stability by 2023, this is a growing market.

Adapting for the future

One key challenge for student landlords is that demand for their accommodation can be determined by the recruitment performance of the major universities in the towns and cities within which they operate.

Therefore, while 2021 has been a record year for AFS, the national picture does not account for significant regional variations.

In some cities with strong-performing universities there is not enough accommodation to meet demand while in others, where the institution is performing poorly, a decline in student intake can hit demand.

International solution

As a solution many universities struggling to meet their undergraduate recruitment targets will turn to the postgraduate market to address this shortfall.

While international students account for only 20% of undergraduates they represent 40% of all postgraduate students. Therefore, student cities with rising post-grad populations are likely to see an influx of international students.

Boosting online presence and reliable rental income

Given that the main selection criteria still apply, attracting these students is a matter of adapting marketing correctly.

In particular, the student house hunting process is almost all online now, so the latest video or virtual tour is essential to promote properties that can’t be viewed in person.

At the same time working with a reliable guarantor company like Housing Hand will take the risk out of accepting tenants from overseas.

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76% of councils report an increase in landlords selling up and warn of increased waiting lists

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Councils warned today of a growing crisis in the private rented housing sector, with a sharp rise in landlords selling up or converting their properties into Airbnb’s. The District Councils’ Network that represents over 200 councils conducted a snap survey showing 76% of councils have seen an increase in landlords selling up properties.

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Government updated plan B – Moving home during coronavirus

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This guidance provides advice to those working within the home buying and selling process and those moving home. Read it alongside the guidance on what you should do to keep safe.

Following the emergence of the Omicron variant of COVID-19

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LATEST: Landlord loses two-year battle over £18,400 HMO licensing fine

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A landlord firm has lost its case against Thurrock Council after the Court of Appeal ruled that it could not use the excuse of believing it wouldn’t be granted an HMO licence.

Hersch Sternlicht, a director of North London firm Palmview Estates Ltd, and his company were fined £18,400 in November 2020 for failing to provide adequate living conditions for tenants at an HMO in London Road, Grays, following a long-running battle with the local authority.

Sternlicht was also issued a Civil Penalty Notice for breaches found under the HMO management regulations including inadequate fire safety measures, a water leak and a defective boiler.

Palmview then built a kitchen extension to comply with the notices, applied for an HMO licence in July 2019 and appealed the Final Notice in September.

Reasonable excuse

It did not dispute that it had been managing or was in control of the property without an HMO licence but said it had a reasonable excuse for not having one because it had been told by a council employee that there was no point in applying for it while there was an ongoing planning dispute over the kitchen.

A First Tier Tribunal ruled in favour of the landlord, saying: “We consider that a landlord who did not apply for a licence because he was told or led to believe by the council that such an application was a waste of time would have a reasonable excuse for his failure to license.”

However, the council appealed and an Upper Tier Tribunal ruled in its favour, saying: “I am not persuaded that where a landlord fails to apply for a licence because it thinks it will be refused and for an incorrect reason, that amounts to a good reason not to apply.”

An Appeal Court judge has now dismissed Palmview’s case, saying: “A person might have a perfectly reasonable excuse for not applying for a licence which does not (everything else being equal) give that person a reasonable excuse to manage or control those premises as an HMO without that licence.”

Giles Peaker, a partner at Anthony Gold solicitors, tells LandlordZONE that the First Tier Tribunal seems to have got itself confused. He adds: “There may well be reasonable excuses for failing to apply for a licence, but not applying because you are sure the licence won’t be granted can’t be one of them. Not if you continue to run the HMO.”

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