Welsh landlord faces huge fine over multiple HMO regulation breaches

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A landlord and ‘property investor’ has admitted a string of housing offences relating to his Newport HMO after previously denying he had done anything wrong.

Robert Evans, 51, of Cefn Tilla Road, Usk, appeared before Gwent magistrates charged with three offences over the management of the Redland Street property in the Crindau area of the city (pictured).

His fine may be hefty – in 2020 a landlord in Newport was fined £20,000 plus costs for similar offences.

He had been in court last October when he pleaded not guilty but has now admitted controlling or managing an HMO without a licence in January 2020.

Evans was also charged with failure to comply with a housing notice and to produce the necessary documents.

The third charge was of failing to ensure that firefighting equipment and fire alarms were in good working order, it has been reported.

Sentencing

Evans is set to appear before magistrates on 28th January for sentencing and has been ordered to provide the court with the last three years’ worth of his accounts and tax returns.

Company House records show that Evans is a ‘property investor’ and ‘property consultant’ with three different companies registered. Two are involved in lettings and the third is involved in property development.

Newport has both a mandatory and additional licensing scheme that cover all HMOs in the city. Its HMO licensing scheme came into force on 1 July 2019 and expires 30 June 2024.

A property must have a licence if there are three or more unrelated people forming more than two households in the same building.

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BLOG: After a torrid pandemic, the London rental market is back

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London is the greatest city in the world yet in property market terms it’s rather been eclipsed by Liverpool, Manchester, Nottingham and Sheffield of late.

By way of both property values and rental prices, our capital has uncharacteristically been the poor relation (see graph).

In fact, during 2021 according to Zoopla, London saw the second-lowest house price growth of all UK cities at just +2.8% whereas the aforementioned northern enclaves recorded growth of 10.7%, 8.5%, 8.1% and 8% respectively and the UK as a whole by 5.2%.

Rentals were subdued. The most recent stats from the Office of National Statistics (November) show that monthly rents across the country rose by 2.5% last year, but those in London decreased by 0.1% as demand reduced.     

But now the good news – London is back.

While the data doesn’t show it yet, my experience at the coal-face via our 26 offices (18 in London and 8 overseas) is that demand from buyers and tenants is returning strongly. The number of applicants that we are registering is up over 150% compared to the same period in 2020 and up 47% versus 2019.

Resurgence

This resurgence in activity is thanks to a combination of things. We’re seeing overseas buyers return to the market – and when I say return, I mean they are physically back in town viewing and buying for the first time since early 2020 when they were last able to. Overseas tenants are back too, especially students.

In addition to this we have a whole new group of tenants and buyers – people from Hong Kong with BNO visas moving to the UK permanently. 

And, despite the ‘race for space’ that characterised headlines last year as a property backstory, many people who tried a more rural existence as their WFH base (working from home) have since decided that country living in the form of sparsely located shops, slow broadband and even slower tractors obstructing the school run, are not fun things to contend with after all.

Office proximity

As desks beckon once again, city workers are yielding to the age-old balance of being as close to the office as their budget will allow.

This observation is supported by Rightmove and the Halifax both of which report that interest in flats vs houses has surged, especially in cities.

In 2022 yields will begin to rise, as will asset prices. I forecast that rents will be boosted by between 3% and 4% and house prices themselves by more – a likely 5% increase between now and December.

London has always led the way historically and hence in the last decade it can still boast that its average house is worth 79% more over that time. By comparison, the UK as a whole added 60% to the typical home and, London prices being higher, the cash increase is more than double at £229,000 versus £101,000.

Our biggest city may have languished for a while but to write it off in favour of its smaller contemporaries would be a mistake. And in my opinion, no amount of ‘levelling-up’ is going to change that over the long term. 

Author: Marc von Grundherr is a Director at Benham & Reeves, the London estate and letting agents.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – BLOG: After a torrid pandemic, the London rental market is back | LandlordZONE.

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BLOG: After a torrid pandemic, the capital is back

admin    Uncategorized     agents

London is the greatest city in the world yet in property market terms it’s rather been eclipsed by Liverpool, Manchester, Nottingham and Sheffield of late.

By way of both property values and rental prices, our capital has uncharacteristically been the poor relation (see graph).

In fact, during 2021 according to Zoopla, London saw the second-lowest house price growth of all UK cities at just +2.8% whereas the aforementioned northern enclaves recorded growth of 10.7%, 8.5%, 8.1% and 8% respectively and the UK as a whole by 5.2%.

Rentals were subdued. The most recent stats from the Office of National Statistics (November) show that monthly rents across the country rose by 2.5% last year, but those in London decreased by 0.1% as demand reduced.     

But now the good news – London is back.

While the data doesn’t show it yet, my experience at the coal-face via our 26 offices (18 in London and 8 overseas) is that demand from buyers and tenants is returning strongly. The number of applicants that we are registering is up over 150% compared to the same period in 2020 and up 47% versus 2019.

Resurgence

This resurgence in activity is thanks to a combination of things. We’re seeing overseas buyers return to the market – and when I say return, I mean they are physically back in town viewing and buying for the first time since early 2020 when they were last able to. Overseas tenants are back too, especially students.

In addition to this we have a whole new group of tenants and buyers – people from Hong Kong with BNO visas moving to the UK permanently. 

And, despite the ‘race for space’ that characterised headlines last year as a property backstory, many people who tried a more rural existence as their WFH base (working from home) have since decided that country living in the form of sparsely located shops, slow broadband and even slower tractors obstructing the school run, are not fun things to contend with after all.

Office proximity

As desks beckon once again, city workers are yielding to the age-old balance of being as close to the office as their budget will allow.

This observation is supported by Rightmove and the Halifax both of which report that interest in flats vs houses has surged, especially in cities.

In 2022 yields will begin to rise, as will asset prices. I forecast that rents will be boosted by between 3% and 4% and house prices themselves by more – a likely 5% increase between now and December.

London has always led the way historically and hence in the last decade it can still boast that its average house is worth 79% more over that time. By comparison, the UK as a whole added 60% to the typical home and, London prices being higher, the cash increase is more than double at £229,000 versus £101,000.

Our biggest city may have languished for a while but to write it off in favour of its smaller contemporaries would be a mistake. And in my opinion, no amount of ‘levelling-up’ is going to change that over the long term. 

Marc von Grundherr is a Director at Benham & Reeves, the London estate and letting agents.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – BLOG: After a torrid pandemic, the capital is back | LandlordZONE.

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BLOG: Why ‘upmarket’ HMOs are the big growth opportunity

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HMOs are one of the key areas of the private rental sector experiencing strong growth.

Recent research revealed that 31% of landlords in this sector are looking to acquire more units. And yet they still have a poor public reputation.

The ‘problem’ with HMOs stems from the traditional demand. Tenants choose shared living as an economic decision, not a lifestyle one, and the properties are often in streets that traditionally have large family homes.

These HMOs also tend to be basic to keep them affordable, further reinforcing the idea that they are ‘low-rent’.

This has led to angry neighbours, council objections, and medium-income professionals staying clear.

To exacerbate this problem, HMOs’ higher returns attract some investors who put money ahead of ‘service’.

And a small number of unscrupulous HMO landlords, along with others who naively venture in without understanding the higher management load, also give the sector a bad name.

But this view of HMOs only reflects a small part of the market and is not representative of the post-pandemic world.

Rebirth

COVID has accelerated the trend of shared living – also known as co-living or flatshares, house shares all of which, though there are debates about how they differ, are similar.

And their popularity has been growing, particularly as many single young professionals look for ‘a community’ during their initial years living in a city or town.

Remote working

As more companies allow home working following the recent lockdowns so living in a small flat, alone, looks far less appealing.

Sharing a larger space with like-minded people is no longer just an economic response to housing needs, it is becoming the way to live.

Shared future?

More and more forward-thinking agents are recognising how much money is being left on the table by not grabbing the HMO market with both hands.

HMOs naturally require more services, and at a higher frequency too due to shorter average tenancy length and greater regulation.

But with higher returns, property owners are often less price-sensitive and recognise the specialist nature of the management.

Previously, the lack of management software suitable for HMOs has made their management daunting for many landlords and agents, but the introduction of management software such as ours which specialises in shared living has enabled a larger pool of agencies and self-managing landlords to capitalise on HMOs.

In many cities some of the most fashionable accommodation is, essentially, an HMO and good design and architecture mean the public’s perception of them is now changing, attracting more professionals tenants. The opportunities here, we believe, are endless.

Vann Vogstad is CEO and founder of COHO.

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BLOG: Why more upmarket HMOs are the big growth opportunity

admin    Uncategorized     agents

HMOs are one of the key areas of the private rental sector experiencing strong growth.

Recent research revealed that 31% of landlords in this sector are looking to acquire more units. And yet they still have a poor public reputation.

The ‘problem’ with HMOs stems from the traditional demand. Tenants choose shared living as an economic decision, not a lifestyle one, and the properties are often in streets that traditionally have large family homes.

These HMOs also tend to be basic to keep them affordable, further reinforcing the idea that they are ‘low-rent’.

This has led to angry neighbours, council objections, and medium-income professionals staying clear.

To exacerbate this problem, HMOs’ higher returns attract some investors who put money ahead of ‘service’.

And a small number of unscrupulous HMO landlords, along with others who naively venture in without understanding the higher management load, also give the sector a bad name.

But this view of HMOs only reflects a small part of the market and is not representative of the post-pandemic world.

Rebirth

COVID has accelerated the trend of shared living – also known as co-living or flatshares, house shares all of which, though there are debates about how they differ, are similar.

And their popularity has been growing, particularly as many single young professionals look for ‘a community’ during their initial years living in a city or town.

Remote working

As more companies allow home working following the recent lockdowns so living in a small flat, alone, looks far less appealing.

Sharing a larger space with like-minded people is no longer just an economic response to housing needs, it is becoming the way to live.

Shared future?

More and more forward-thinking agents are recognising how much money is being left on the table by not grabbing the HMO market with both hands.

HMOs naturally require more services, and at a higher frequency too due to shorter average tenancy length and greater regulation.

But with higher returns, property owners are often less price-sensitive and recognise the specialist nature of the management.

Previously, the lack of management software suitable for HMOs has made their management daunting for many landlords and agents, but the introduction of management software such as ours which specialises in shared living has enabled a larger pool of agencies and self-managing landlords to capitalise on HMOs.

In many cities some of the most fashionable accommodation is, essentially, an HMO and good design and architecture mean the public’s perception of them is now changing, attracting more professionals tenants. The opportunities here, we believe, are endless.

Vann Vogstad is CEO and founder of COHO.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – BLOG: Why more upmarket HMOs are the big growth opportunity | LandlordZONE.

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Industry given until March for plan to fix cladding on low-rise buildings

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Secretary of State for Levelling Up, Housing and Communities Michael Gove has warned developers that they must pay to fix the cladding crisis. Mr Gove has today written to industry giving them a deadline of early March to agree a fully funded plan of action including remediating unsafe cladding on 11-18 metre buildings

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LATEST: Minister signals likely U-turn on Airbnb regulation with consultation

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The government is to launch a consultation on plans to introduce a national register in England for holiday lets which will look at their effect on local housing supply and whether greater compliance with health and safety regulation is needed.

Farron is both the party’s housing spokesperson and MP for a leading holiday hotspot constituency in the Lake District, Westmorland and Lonsdale.

This announcement came during a parliamentary debate on the issue in parliament called by former LibDem leader Tim Farron. The announcement follows previous government rebuttals that holiday lets could be a problem for communities in holiday hotspots, and that it was largely a matter for the market, not government, to tackle.

In answer to comments by speakers including Hunters founder and MP Kevin Hollinrake and shadow housing minister Matthew Pennycook that a national register would shed light on how many holiday rentals there are in England, housing minister Chris Pincher revealed that a consultation on the matter is due.

Advertse effects

“We recognise that a large number of second homes and holiday lets can have adverse effects in some areas, so I will look closely at his proposals and at the points raised by other colleagues,” he said.

“We also do not have the information needed to understand how, and for how long, a property is being used.

“I can confirm that we propose to consult on the introduction of a tourist accommodation registration scheme in England so that we can build an understanding of the evidence and the issues that second homes present, particularly when driven by the rise of online platforms such as Airbnb.

“We will launch that consultation later this year and will begin the process of a call for evidence in the coming weeks.

“We want to look at not just the issue of short-term holiday letting, but the effect that it has on supply. We will also look at compliance, health and safety regulations and the effect of antisocial behaviour and so on.”

Read the debate in full.

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LATEST: Lords committee slams PRS for being ‘increasingly unaffordable’

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A leading group of cross-party peers has criticised the private rented sector (PRS) for its increasing unaffordability in a report published today by the House of Lords.

Called Meeting House Demand, it looks at all the factors creating the UK’s housing crisis and follows months of interviews with the key movers and shakers within the housing market including several housing ministers and the National Residential Landlords Association.

It also set out to discover the market’s structure, demographics, demand for different types of housing tenure including rented, and whether the government’s target of building 300,000 additional new homes a year is realistic.

But the NRLA told the Lords’ Built Environment Committee that unaffordability within the PRS is down largely to government policy, highlighting how the curtailing of mortgage interest tax relief and the introduction of a 3% stamp duty surcharge is restricting supply while high house prices, particularly in the south of England, is increasing demand for rented accommodation.

Highly questionable

The NRLA says these decisions by then Chancellor of the Exchequer George Osborne were based on the ‘highly questionable’ assumptions that landlords ‘crowd out’ homeowners from the sales market and that landlords were taxed more favourably than homeowners.

The committee’s report says the biggest problem facing first-time buyers is not competition from landlords, but the inability to save up a deposit, ‘a goal that becomes increasingly out-of-reach if house prices rise faster than savings’ it says.

But it also points out that the proportion of private tenants income spent on rent has risen from 12% in 1980 to 32% today across the UK but 42% in London.

In comments published by the report, Toby Lloyd, Chair of the No Place Left Behind Commission and an Independent Housing Policy Consultant, said: “The private rented sector is by far the most expensive, by far the lowest quality and by far the least popular.

It is absolutely the worst possible tenure for almost everybody in it.” He added.

“Most people who are private renting would much rather be in something cheaper and higher quality. Who would not be? That means either social renting or owner-occupation. It is absolutely the tenure of last resort.”

More redress

Key recommendations of the report, which was chaired by Baroness Neville-Rolfe (pictured), include giving tenants greater redress – something the government is likely to introduce within its soon-to-be-published Rent Reform proposals, and that more rented social housing should be built to take more financially vulnerable tenants out of the private rented sector, where they tend to live in more crowded, poorer quality conditions than homeowners.

Talking to LandlordZONE, Baroness Rolfe said: “We were struck by the huge growth in the private rented sector in recent years from 10% to 20% of the housing market, and the change in landlord demographics in recent decades,” she said.

“45% of landlords have only one property and another 38% have between two and four properties – but most worryingly landlords are getting older and the evidence we heard suggested a younger generation is not joining the sector.”

Read the report in full.

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BREAKING: Owners in ‘medium’ towers hit by cladding crisis will NOT pay ACM costs

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Housebuilders are to foot the £4 billion cost of releasing the half a million leaseholder apartment owners in medium-size towers from the ‘nightmare’ of both huge remediation costs and being unable to sell their homes.

Housing secretary Michael Gove has written to developers today to say that he is ‘coming for them’ to fund a new initiative that will relieve property owners of the huge costs of replacing unsafe cladding from towers over 11m tall but under 18m.

He also says he expects developers to complete the works ‘at pace’ and that agreement on a plan of action will be completed by the end of March.

Although government funding is already in place for taller towers over 18 metres, many leaseholders in medium-size towers remain trapped as huge remediation and other costs related to cladding mean they are unable to sell or re-mortgage their properties.

The Department for Levelling Up, Housing and Communities which Gove leads has been under huge pressure from campaigners and MPs from across the political spectrum to helps these leaseholders, many of whom have been forced to take out huge loans to pay for cladding remediation.

Innocent leaseholders

In the letter, Gove says: “It is neither fair nor decent that innocent leaseholders, many of whom have worked hard and made sacrifices to get a foot on the housing ladder, should be landed with bills they cannot afford to fix problems they did not cause.

“Some developers have already done the right thing and funded remedial works and I commend them for those actions.”

Cladding campaigner Steve Day told the BBC that he is ‘sceptical’ that a voluntary scheme will be signed off by builders’ shareholders, although if they dodge paying into the fund, Gove will tell MPs that ‘legal compulsion’ will follow.

“Government has accepted its share of responsibility and made significant financial provision through its ACM remediation programme and the Building Safety Fund.

What are developers being asked to do?

• make financial contributions to a dedicated fund to cover the full outstanding cost to remediate unsafe cladding on 11-18m buildings, currently estimated to be £4 billion;
• fund and undertake all necessary remediation of buildings over 11 metres that they have played a role in developing;
• provide comprehensive information on all buildings over 11 meters which have historic safety defects and which they have played a part in constructing in the last 30 years.

Peter Redfern (pictured), Chief Executive of Taylor Wimpey, said the building industry needed to “get to grips with this issue – we shouldn’t be arguing about this so many years after the Grenfell tragedy and everybody now needs to play their part”.

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Updated government guidance on home moves during the pandemic

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The housing market in England remains open. This means that people looking to move home can both continue with planned moves and view new properties to move into in the future.  >> https://www.gov.uk/guidance/moving-home-during-coronavirus-covid-19

Private rented and social housing sectors: Those renting a property

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