Levelling up Bill targets vacant shop landlords…

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The new levelling up Bill will force landlords into letting auctions

Announcing another 68 local authorities that will receive support from the High Streets Task Force, including Southend-on-Sea, Somerset West and Taunton, Rossendale and Dudley, the Government spells out its commitment in its new Levelling Up and Regeneration Bill.

The locations have been allocated using the Indices of Multiple Deprivation (IMD), together with other measures of retail exposure. Delivery of funds and support to these local authorities is to be staggered, starting from this summer, until the end of the programme in 2024.

In addition, new powers are to be introduced as part of the Bill, which will be announced in the Queen’s Speech next month. The Government has said it will give more powers to local authorities to enable them to make high streets and town centres “the thriving hearts of communities again.”

“We will incentivise landlords to fill vacant units by giving local authorities the power to require landlords to rent out vacant properties to prospective tenants. This will tackle both supply and demand side issues to avoid high levels of high street vacancies and blight, and in turn increase the attractiveness and vitality of our high streets,” says the Government’s white paper.

This, the Government says, builds on the High Street Task Force’s wider offer to all communities, which includes online resources and training modules, webinars and access to data dashboards.

New life on the high street

Vacant shops are to be “reborn” under plan which aims to “breathe life into high streets” by forcing landlords to let out retail units that have been vacant for six months

In other words, retail landlords in the chosen locations could be forced to rent out shops that have been vacant for 6 months or more. If the owner can’t let the shop, then councils will be empowered to hold letting auctions.

The plan is to help remove boarded-up shop properties that blight these once thriving town centres, and return them to their former glory by allowing community groups and small businesses to take over.

Conversions and re-purposing

The High Streets Strategy, through changes to the planning laws, has been making it easier to convert empty shops into new uses like high street homes; granting automatic rights for pubs, restaurants and cafes to allow takeaway and al fresco dining; and make high streets safer and cleaner, with a focus on tackling litter, gum staining and graffiti.

The UK Government has been providing £1.7bn of temporary business rates relief in 2022-23 for up to 400,000 retail, hospitality and leisure properties to support the high street until the next revaluation. With the announcement of a freeze in the business rates multiplier worth £4.6bn over the next five years, all ratepayers in England will see a tax cut.

High street vacancies

With one in seven shops vacant on the UK’s high streets, the number of empty shops has soared since the pandemic. Many of these were shuttered during the lockdowns and failed to get back on their feet as the shift towards online shopping has accelerated.

The large fashion retailer chains have been among the hardest hit, with the likes of Debenhams, Dorothy Perkins and Topshop, along with many high street banks, contributing to the vacancies.

Last year more than 8,700 chain stores closed on Britain’s high streets, in shopping centres and on retail parks in the first six months. During this phase of the pandemic there was an average of nearly 50 outlets a day closing down.

But despite some high-profile retail failures, the number of closures has actually stabilised since then and the outlooks appears brighter as the effects of the pandemic recede.

Government support

Lisa Hooker, consumer markets lead at PwC says she believes continued government support, combined with resilient consumer spending, has helped many operators weather the storm and survive the pandemic.

Under the Government’s plans, local authorities will be given the new powers to to force landlords to rent out their vacant commercial property on high streets through a Compulsory Rental Auction. After a short grace period given to landlords to let their shop, the local authority will instigate an auction, inviting bids from interested parties.

Government ministers see this as a means of rapidly reducing the number of boarded-up shops while creating new opportunities for local small businesses and community groups. This, they argue will have a snowball effect, helping increase footfall and spending in these blighted town centres.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Levelling up Bill targets vacant shop landlords… | LandlordZONE.

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A familiar story I believe?

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I have issued a S21 to a tenant. I need to sell the house (they have never been a great tenant!). The council and Shelter have apparently advised the tenant to stay put – a familiar story I believe?

The tenant says the council has said some social housing is being built and she will get one

View Full Article: A familiar story I believe?

Tenancy deposit cap cut costs for tenants in England and Wales

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The average tenancy deposit paid to landlords has dropped steadily since the start of the pandemic and the introduction of the deposit cap.

New research by mydeposits reveals that tenants paid an average of £948 in 2011, rising to a peak of £1,108 in 2019. This dropped 6% to £1,040 in 2020 and a further 1% to £1,025 in 2021, meaning that landlords now have less money to cover damage or tenants who disappear without paying rent arrears. However, the cost of a tenancy deposit is still some 8% higher than it was a decade ago as the cost of renting has also climbed by £202 per month (30%). 

Total deposits rise

The figures show that there’s been a 91% increase in the value of deposits protected across England and Wales; from 2.2 million deposits with a total estimated value of £2.1 billion in 2011, up to £4.3 billion in 2021 and more than 4.2 million deposits.

Eddie Hooker, CEO of mydeposits, says the hurdle of a tenancy deposit remains considerably higher than it was in 2011. “The good news is that it has started to fall since 2019 and the introduction of deposit caps, which have ensured that any sums charged don’t exceed the five to six-week thresholds set by the government. Of course, the pandemic has also played a part with rental values falling in many areas, thus reducing the deposit charged based on these thresholds.” 

Downward trend

Hooker adds that it’s looking increasingly likely that rental market values may once again start to climb in 2022, which could reverse the downward trend seen in the cost of a tenancy deposit. “Fortunately, tenants have more choice now especially with the introduction of initiatives such as Ome, our deposit replacement product and landlords are increasingly being flexible in offering these alternatives.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Tenancy deposit cap cut costs for tenants in England and Wales | LandlordZONE.

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UK’s Number 1 Property Networking Event Returns – Baker Street Property Meet Is Back

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Join the UK’s Number 1 Networking Event in Central London, on 27th April at 6pm. Book Your Tickets For This Months Baker Street Event Here: https://www.bakerstreetpropertymeet.com/

The Baker Street Property Meet is the ideal place to get your burning property questions answered.

View Full Article: UK’s Number 1 Property Networking Event Returns – Baker Street Property Meet Is Back

BBC – Is the private rented sector under attack? Help us defend it

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The BBC has asked propertymark to collate data for them so the BBC can use the survey to “draw the country’s attention to the issue of landlords deciding to sell or jump to short term lets.”

The BBC say they want new incentives to bring in new landlords to the PRS whilst keeping the old ones.

View Full Article: BBC – Is the private rented sector under attack? Help us defend it

Social media adverts prompt council to come down hard on landlords

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Rotherham Council is set to start using banning orders in a bid to crack down on the town’s rogue landlords.

Those guilty of unlawful eviction, harassment, overcrowding and fire or gas safety offences would then find themselves banned from renting out properties with a custodial sentence of up to 51 weeks, an unlimited fine, or both, if they ignore the order.

Social media

A council report says Rotherham has seen an increase in unregulated and/or unaccredited agents and landlords advertising rented properties through social media, without any appropriate letting background. It adds: “A number of landlords have now, as a result of selective licensing, been found to be in breach of relevant legislation. This policy will offer the council the means to take action against landlords and agents who have been convicted of certain offences, and who routinely offer poor housing, often to the poorest and most vulnerable in society.”

The authority believes there is a clear public interest in managing landlords who commit serious offences effectively, both to protect their tenants and the wider community. It explains: “Strategic housing within adult care, housing and public health have noted that the potential to use banning orders are a necessary tool to improve the private rented sector and protect tenants.”

Financial burden

In 2020, the council extended – and expanded – its selective licensing scheme, despite protests that it would be an unnecessary financial burden on landlords. Those with properties in the Eastwood/Town Centre, Masbrough, Maltby South East, Dinnington, Thurcroft and Parkgate areas have to stump up £521 for a licence.

Banning orders are set to be approved at the council’s next cabinet meeting on 25^th April.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Social media adverts prompt council to come down hard on landlords | LandlordZONE.

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WFH and HS2 increase rental inflation outside London

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The cost of renting a home in London is now on average four times more expensive than some parts of northern England, new research shows. Renters now face having to fork up to £1,757 per month on average to secure the keys for a pad in Greater London.

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Proportion of landlords reporting increasing tenant demand reaches high of 62%

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Research undertaken on behalf of Paragon Bank has revealed that the strong tenant demand seen during last year has continued into 2022 after growing to the highest level recorded since 2011, when research agency BVA BDRC started tracking the metric.

View Full Article: Proportion of landlords reporting increasing tenant demand reaches high of 62%

Due diligence is time-consuming – but ignore it at your peril

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Investors and landlords have been urged not to skimp on research and detective work when sourcing new business opportunities in order to prevent falling victim to scams.

Louise Reynolds, director of Property Venture whose firm helps expats and professionals through a bespoke property sourcing service, tells LandlordZONE that many people are coming a cropper when they’re new to property investing. “They trust everything someone says,” she explains. “There are certainly more people out there who are ready to hoodwink novices with a sales spiel.”

Property show

Reynolds joined Landlord Action’s Paul Shamplina, landlord Patricia Ogunfeibo and Hayley Andrews from Your Freedom Empire at the recent Property Investor show in London, to talk about due diligence, offering tips for landlords when dealing with new tenants and for investors looking to do business with individuals and companies.

Reynolds explained how a recent search on social media and LinkedIn had revealed a gap in a prospective developer’s profile which coincided with a period working at a different company which had gone bust. This rang alarm bells and prompted more digging. She advised: “When you’re checking people out, it’s what’s missing as much as what’s there. Some people supress information.” She said it was wise to get three points of information before signing up to anything, so that investors were not just relying on Companies House data or one person’s review.

Land Registry

Putting a tracker on a particular name at Companies House to bring up other companies they have been involved with is a good way to make sure they haven’t gone bankrupt, it was suggested, while looking on the Land Registry and putting a name into Google to check customer reviews were also good ideas.

“Use Google to find information about people, do a CCJ search and check their company accounts to find out whether they’ve filed them, and break these down to build up a picture,” advised Shamplina. “If you’re dealing with a professional, such as a letting agent, ask to see their professional indemnity insurance to understand what it covers.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Due diligence is time-consuming – but ignore it at your peril | LandlordZONE.

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Funny film makes serious point about renters’ poor treatment

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Shelter has produced a darkly comic short film to highlight the ‘broken rental system’, featuring a fictional letting agency and overly truthful agent.

Comedian Rory Marshall ambushes potential tenants browsing the property listings of Only Choice Lettings’ window, explaining features about the properties, including the lack of a boiler and contaminated drinking water. He tells one mother and child: “It’s all the original features. So we’ve got a working fireplace, asbestos, wooden floorboards.”

Haunted house

Back in the office he’s on the phone with another prospective tenant, saying: “Some people have said that the house is haunted, because the landlord will ghost you at the mere mention of mould! He will be there to collect the rent though.” The agent admits that he cuts a few corners but adds: “It’s either take what we’ve got or go and live on the streets, so…not really our problem.”  

All the properties mentioned in the two-minute online film are based on true stories according to the homeless charity which aims to use the film to help achieve its goal of making private renting safer and fairer, and to build support for the upcoming Renters’ Reform Bill, the ban on Section 21 evictions, and a national landlord register.

Grim reality

“Every day our services hear from private renters stuck in nightmare situations, too afraid to complain for fear of eviction,” says Osama Bhutta, director of communications, policy and campaigns at Shelter. “This satirical film will make you laugh at first, but then it will make you gasp. It is a powerful reminder of the grim reality of private renting where millions of people have no choice but to put up with poor conditions. We hope it will unite renters in the fight for home.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Funny film makes serious point about renters’ poor treatment | LandlordZONE.

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