LATEST: Coventry to clamp down on HMOs with new planning powers

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Coventry aims to come down hard on HMO expansion within the city by introducing an Article 4 Direction.

Councillors have approved the plans which will now form part of a public consultation this summer.

They hope to change the rules which currently allow landlords to turn some residential homes into HMOs without planning permission in areas with already high levels. All HMO conversions would also need planning approval.

The move follows the council’s decision last month to introduce civil penalty fines of up to £30,000 for landlords flouting licensing conditions, including a failure to comply with over-crowding and improvement notices as well as failure to licence an HMO.

Coventry already has an additional licensing scheme for smaller HMOs controversially phased in during the worst months of the pandemic, and set up a free, voluntary accreditation scheme in a bid to raise standards in the sector.

Councillor David Welsh (pictured), cabinet member for housing and communities, says it wants to manage the development of HMOs and have the ability to control their numbers in certain areas of the city.

He adds: “Housing developments must meet housing needs in the city and that’s good quality affordable homes that serve all of our residents delivering the right amount of open space including areas for play and recreation, and that have a positive impact on our neighbourhoods.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Coventry to clamp down on HMOs with new planning powers | LandlordZONE.

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ON A MISSION: The landlord making Britain savvier about money and wealth

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Gill Fielding is annoyed that the UK does not teach its children to be money and wealth creation savvy before they leave school.

The landlord, property educator and former chartered accountant, who runs the UK’s only AQA Unit-accredited property course via her company Fielding Financial as well as money education charity Money Mum, is annoyed that so many people end up in debt rather than building up wealth.

During a career in property spanning 40 years, Fielding says she has always wanted to – and continues to – ‘light the spark’ of imagination among as many people as possible to get thinking about how to manage their money better, and create long-term wealth.

“The road to that is really a motorway with different lanes and the more sophisticated you are, the more lanes there are – pensions, property, stocks and shares and starting your own business are all options,” she says.

“But the easiest in the long run, certainly to understand for most people, is property – because we’ve all rented or owned a property at some point.”

Accidental landlord

Fielding’s own journey to wealth was more accidental than planned. After a childhood in a poverty-stricken area of London’s East End, and after leaving school to begin work, she then gained a place at Sussex University.

Before starting her course, she saved up £4,500 while working five different job (not realising that students rented together in halls or houses) to buy a property for £7,000 in Brighton.

“So instead I rented it out while I was a student and sold it after graduation for three times more than I paid for it – and used the profit to buy more, and then a lot more properties, later getting into HMOs,” she says.

These days she is more of a passive property investor – entering joint ventures, funding whole developments or helping provide finance to people who do her courses.

“I still have a handful of buy-to-lets and HMOs – it’s been a very varied journey,” she adds.

Life mission

“It’s a life mission – if I go and sit on beach on Barbados and then come back, what am I supposed to do the next day? There’s no fulfilment in that for me. 

“I decided about 25 years ago – after a life crisis following the birth of my third child – that I wanted to help as many people as possible light the spark of financial possibility during my life, particularly through property investment. And that’s how all my different initiatives started. And I still believe investing in property is one of the keys to wealth creation.

“Of course being a landlord should not be taken lightly in today’s highly regulated world. But if you do it properly the rewards are significant – it’s all about education.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – ON A MISSION: The landlord making Britain savvier about money and wealth | LandlordZONE.

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Video Testimonial from Alphaletz CEO Richard Jackson

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Join Richard Jackson, Co-Founder of Alphaletz award winning App for landlords and Mark Alexander from Property118 as they discuss some of the reasons why incorporation could be good for Landlords in the UK.

Richard talks about this own personal experience of being a portfolio landlord and some of the benefits of incorporation he experienced as a client of Property118 and Cotswold Barristers.

View Full Article: Video Testimonial from Alphaletz CEO Richard Jackson

Rent Repayment Orders must be doubled to two years of rent, says Sadiq Khan

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London mayor Sadiq Khan has called on the government to double the amount that landlords can be asked to pay via a Rent Repayment Order and also announced additional funding for housing enforcement.

Khan wants Ministers to increase the amount that First Tier Tribunals can award tenants found to be living in unlicenced properties to a maximum of two years of rent each.

Because rents in London are high, fines for relatively minor trip-ups are often eye-watering in London.

In September last year a central London landlord was told to pay £25,000 back to his tenants after a procedural mistake.

Khan is also to fund a new qualification and training programme for the capital’s housing enforcement officers to encourage them to clamp down harder on criminal landlords and support vulnerable tenants.

The new course, an Advanced Professional Certificate in Private Sector Housing, aims to help councils find more appropriately-qualified staff, but the announcement makes no commitment to better fund housing enforcement in London – a key reason why so few rogue landlords are prosecuted or have RROs made against them.

The aim of the course, which is being developed in partnership with the Chartered Institute of Environmental Health, aims to train those with little or no experience in environmental health or private rental housing up to the standard needed to carry out the duties of a private rented sector enforcement officer to tackle rogue landlords – part of an overall ‘Better Renting Programme’ to build skills and capacity across the capital’s PRS enforcement teams.

“Every single Londoner deserves a secure, safe and comfortable home. Nearly a fifth of London’s private rented accommodation doesn’t meet basic standards and it is clear that more needs to be done to support tenants,” Khan says.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Rent Repayment Orders must be doubled to two years of rent, says Sadiq Khan | LandlordZONE.

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Right to Rent – Unlawful discrimination consultation

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The Home office has opened a new consultation and code of practice applying only to residential tenancy agreements commencing on or after 6 April 2022. It also applies where a repeat check on an existing tenant is required to be carried out on or after 6 April 2022 to retain a statutory excuse: Click here

The purpose of this code of practice is to ensure that landlords do not unlawfully discriminate contrary to the Equality Act 2010 when carrying out right to rent checks.

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BREAKING: Landlords now covered by cladding fund – but NOT portfolio operators

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Landlords who own flats hit by the cladding scandal will be covered by the remediation fund, the government has announced.

However, portfolio landlords have been left out, with property experts suggesting that this omission will mean work will be held up and their flats could become unsellable.

Last month, it was suggested that landlords would not be included in the fund, but in an amendment to the Building Safety Bill, the government now plans to protect leaseholders who live in a property as their principal residence and accidental landlords – those who do not live in the property, but do not own any other residences, or who own only one other property. Overseas landlords who own one or two properties in the UK will also be covered.

A Department for Levelling Up, Housing and Communities spokesman tells LandlordZONE: “We committed to covering those who sub-let properties. These clauses announced go a bit further.”

However, many in the sector say that excluding many landlords will block building repairs and make flats unsellable. In cases where the developer or the freeholder cannot afford to cover the costs of non-cladding works, flat owners will have to cover the cost of works up to a cap of £10,000 (£15,000 in London).

Portfolio landlords

Portfolio landlords make up a significant proportion of a building’s leaseholders in some city centre blocks, which means there will be long delays for works to remedy fire safety defects because leaseholders will be dependent on landlords’ ability to pay huge bills. 

Experts have warned that even though owner-occupiers in buildings with a large share of landlords would be protected from the costs, their flats would therefore remain un-mortgageable, unsellable and devalued until all works were complete.

It could also stop property investors from being able to sell. Under the new legislation, a buyer purchasing a flat from an owner-occupier would also be protected from the cladding costs and the non-cladding cap.

But a buyer purchasing a property from a portfolio landlord would take on a lease that had no cladding cap protections attached to it, even if the buyer was purchasing as an owner-occupier, according to Giles Peaker of Anthony Gold solicitors.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – BREAKING: Landlords now covered by cladding fund – but NOT portfolio operators | LandlordZONE.

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Tenancy Deposit Scheme fiasco – unilaterally terminated protection?

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I use the Tenancy Deposit Scheme insurance-based scheme. In my opinion, I would sooner pay a small premium to hold the deposit than have to jump through hoops trying to get payments for damages through the custodial scheme.

If as a fait accompli you make a deduction from a deposit that you hold

View Full Article: Tenancy Deposit Scheme fiasco – unilaterally terminated protection?

Three Methods of Financing a Buy to Let Business Incorporation

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There are three main methods of financing a Buy to Let business incorporation. However, one of them is fraught with risks and high costs and it unlikely to be the method you might think of as being risky at first either.

View Full Article: Three Methods of Financing a Buy to Let Business Incorporation

New study finds UK needs 230,000 new rentals per year

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International consultancy, Capital Economics, has arrived at the figure of 227,000 new homes to be built per year, needed to feed the expected future demand and to stabilise the UK rental market.

The National Residential Landlords Association (NRLA) commissioned the respected economics consultancy Capital Economics to carry out the research.

This research by the firm found that if the future growth projections pan out, and owner occupation and social housing demand continues at their present rates of growth, then the private rented sector (PRS) supply of housing needs to increase by 227,000 homes per year.

This would be in-line with government’s own targets, which anticipates growth of nearly 2 million new households over the next decade.

Multiple sources of new supply

Providing the level of new housing advocated by the research consultancy, it suggests, would come through a combination of new-build; converting commercial property for residential use; moving housing stock from short-term to long-term residential lettings; and re-engaging vacant housing into the rental market.

“Even with increased provision of affordable housing and higher rates of owner occupation, both of which are important, our research shows that significant additional investment is needed by landlords in the private rented sector,” says Andrew Evans of Capital Economics.

Capital Economics suggested that the private rented sector is currently heading in the wrong direction with this. Without the necessary changes to the way landlords’ profits are taxed, along with changes to the current regulatory system, the private rented sector housing stock would shrink by around 50% or a half million properties over the next 10 years, thinks the firm.

Andrew Evans, managing economist for Capital Economics, has said:

“The private rented sector, which is predominantly supported by private individual investors, has a key role to play in addressing housing need in the UK.

“However, the stock of homes for private rent has fallen in recent years, driven partly by a series of policy changes.

“Without further changes, that supply could fall by over half a million more over the next decade.

“Even with increased provision of affordable housing and higher rates of owner occupation, both of which are important, our research shows that significant additional investment is needed by landlords in the private rented sector,” he says.

Rents moving ever higher

A severe shortage of rental housing is pushing rents ever upwards as demand continues to rise. People are struggling to find suitable accommodation at a reasonable price now, and with growing numbers of renters projected to continue, the situation will only get worse unless more supply is forthcoming.

UK rents are now on average over £60 per month higher than they were before the coronavirus pandemic first started in 2020, research by property portal Zoopla has found. The average UK residential rent, according to the property portal, was £969 at the end of 2021 and growing.

Without some urgent action Capital Economics concludes, an increasing number of people looking for affordable rental housing will really struggle to find it.

NRLA chief executive Ben Beadle says that their report “…highlights in stark detail the supply crisis now engulfing the sector.”

“For all the efforts to support home ownership, the private rented sector has a vitally important role to play in helping the Government to achieve its housing objectives.

“Without urgent action, the increasing number of people looking for affordable housing will be the ones to struggle as they face less choice and higher rents as supply dries up,” Mr Beal says.

A government spokesperson from the Department for Levelling Up, Housing and Communities has said:

“We support the private rented sector and recognise the crucial role Build to Rent homes have in boosting housing supply and increasing quality and choice for renters across the country.

“This Government is building more genuinely affordable homes to help people on to the housing ladder. Since 2010, we have delivered more than 574,000 affordable homes and we are investing £11.5 billion in affordable housing.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – New study finds UK needs 230,000 new rentals per year | LandlordZONE.

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Gove to force building industry to pay cladding bill BUT will landlords get help?

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Levelling Up Secretary Michael Gove has doubled down on his promise to make the building industry pay for cladding remediation after some bosses said his original proposals were “unrealistic” and “inequitable”.

Under Gove’s latest plans, the government could block planning permission and building control sign-off on developments for non-compliant companies.

Amendments to the Building Safety Bill – which will also make firms pay to fix historical problems instead of leaseholders – now need to be approved by Parliament.

Cost contribution orders will be placed on manufacturers who have been successfully prosecuted under construction products regulations, requiring them to pay their fair share on buildings needing remediation.

Dangerous cladding

New clauses will also enshrine in law the government’s commitment that no leaseholder living in their own home, or sub-letting in a building over 11m, should pay for the removal of dangerous cladding.

Under the plans, developers that still own a building over 11m that they built or refurbished – or freeholders linked to an original developer – will be required to pay in full to fix historic building safety issues.

Building owners who are not linked to the developer but can afford to pay in full will also be required to do so.

Where building owners do not have the resources to pay, leaseholders will be protected by a cap set at £10,000 for homes outside London and £15,000 for homes in the capital.

The Department for Levelling Up, Housing and Communities is still to clarify whether landlord leaseholders will be included in its cladding costs relief initiative. 

A National Residential Landlords Association (NRLA) spokesman tells LandlordZONE: “The NRLA does not feel the amendments tabled by the government to the Bill properly address the problem that buy-to-let landlords who are leaseholders are being treated so much more differently to others.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Gove to force building industry to pay cladding bill BUT will landlords get help? | LandlordZONE.

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