MP’s Strike Back Against Buy To Let Landlords

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MP’s strike back against Buy To Let Landlords as they release a House Of Commons Commission Report about further regulation on the private rented sector.

Joining me to cover this story on Property Breaking News is Andrew Roberts.

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‘Covid is not an excuse to dodge licensing’ judge tells landlord facing £10,000 RRO

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Landlords can’t use Covid lockdowns as an excuse for not licensing a property, a First Tier Property Tribunal has ruled.

Paul Fashade argued that his HMO in Devonshire Road, Lewisham (main image) had previously had a licence for six people which expired in July 2020 and that he and his property manager had tried unsuccessfully to renew it during the pandemic.

He told the tribunal they had emailed Lewisham Council and tried to renew it online – but couldn’t provide any evidence of emails or phone calls. He finally got a licence in February 2022, after the three tenants who brought the case against him had left.

One tenant received a Rent Repayment Order of £2,880 and two shared a joint order of £8,350 for living at the unlicensed six-bedroom HMO between December 2020 and December 2021.

The three reported that they had not been given copies of the gas certificate or EPC with their tenancy agreements and one said his deposit had not been protected until half-way through his tenancy.

They had assumed the HMO was licenced and only discovered its status by making a search of the local authority register.

37 repairs

A report following a council inspection in September 2021 revealed that the house was not in pristine condition and that Fashade had been asked to carry out 37 repairs and improvements to the property as a condition of the granting of a new licence.

He tried to claim that damage had been caused by the tenants, however the tribunal ruled that the cause was more likely due to wear and tear.

It added: “The tribunal does have regard to the respondent’s conduct and that of his manager for whom he is responsible, including making unfounded allegations about the applicants’ conduct, failing promptly to repair faults at the property and disrespectful behaviour towards the applicants.”

Read the tribunal decision in full.

Read more recent news about rent repayment orders.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – ‘Covid is not an excuse to dodge licensing’ judge tells landlord facing £10,000 RRO | LandlordZONE.

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Office market weathering the storm better than expected

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With rental growth in prime London offices set to outpace the rest of the country, the doom mongers predicting permanent working from home (WFH) and office flight have so far, it seems, been on the wrong tack.

Quarter 1, 2022 has seen rent returns rise as UK commercial property recovery generally has been gaining pace, also in warehousing and logistics as well as retail parks. The government’s drive to prime the regions in its levelling campaign, supporting communities’ recovery across the UK, it is hoped, will further boost commercial property.

In it latest RICS Commercial Property Survey, agents are reporting a considerable increase in the number of new tenants looking to rent UK commercial property, “with the uplift particularly prevalent in prime London office space.”

Says RICS:

“Respondents to the survey saw a notable increase in UK office demand in Q1 2022 with the net balance improving to +30% from a flat picture at the end of 2021.”

This shows a significant change in sentiment, which was also beginning to appear in the retail sector, with occupier demand approaching net neutral (-1% net balance). That’s the first time the measure has been anywhere near neutral since early 2017.

Taking in commercial property as a whole, it’s the first time since 2015 that a net balance of +32% of respondents in the RICS survey reported an increase in occupier demand at all levels and across sectors (retail, office and industrial uses).

RICS property agents reported that investor enquiries also saw a substantial increase in early 2022, with the strongest figure since Q3 2015, and a net balance of +32%. RICS says that for the first time since 2017 investment enquiries are now net positive across the three traditional market sectors: office, industrial and retail.

The impact of working from home (WFH)

There’s been much discussion in the media about the impact of home working on city centres, transport, retail and offices. The COVID pandemic disrupted labour markets dramatically during 2020 and 2021, when millions of people were furloughed or losing jobs.

There was a rapid adjustment to homeworking by many thousands as offices were closed to all but a few staff. Many other workers in the vital services were deemed essential and continued to work: in hospitals and grocery stores, on refuse collections and in warehouses, as well as the police and to some extent, the courts.

The post-pandemic economy will undoubtedly change, in many cases for the better, with more flexible working, more omni-channel retailing and home delivery, with much enhanced productivity and innovation through the proficient use of technology.

The question on everyone’s mind in commercial property is, “what affect with this have on rental demand, will occupiers require less space and therefore economise by downsizing?”

Toby Courtald CEO of Great Portland Estates (GPE), one of London’s biggest landlords has conceded that offices will never be quite the same, never as busy as they were before the pandemic, though he is adamant that those who have been predicting “the death of the office” have got it wrong.

GPE owns a multi-billion pound mainly office estate in London and has also swung back into profit this year announcing an end-of-year profit of £167 million at the end of March. The estate’s portfolio valuation increased by £2.65bn or £6.1%, across the year. During the year the property RIET agreed new leasing deals of £38.5 million, a figure that went well beyond the company’s expectations.

The nettle that most office landlords appear to have grasped is they will need to adapt their office space to the post-pandemic requirements, along with the changes needed to meet the new environmental standards, most notably insulation, energy efficiency and air quality. These changes will involve substantial new investment.

In British Land’s case, office investor demand, according to RICS, rose from a net balance of +5% at the end of 2021 to +23% in Q1 2022, and the net balance of respondents predicting a rise in capital values for the prime office sector is the most positive since Q4 2019 (+37% net balance).

With the increase in occupier demand for new office space, rents are expected to rise with a net balance of +19% of survey respondents expecting a rise, compared to +7% in the last quarter of 2021.

Rents for prime office space in central London are anticipated to outpace most other UK regions, while the South East is the only region in which secondary office space is predicted to see growth.

The latest research published by RICS in March has shown that high-quality and well-managed commercial real estate – such as prime office space – is integral to levelling up UK towns and cities*, and one of the asks of the research is that UK Government support commercial real estate, and promote investment in it, to secure levelling up across the UK.

Tarrant Parsons, RICS Economist, says:

“The latest survey feedback points to demand from both occupiers and investors gaining momentum over the quarter, with the office sector in particular now showing signs of recovery.

“This has led to an upgrading in expectations for capital value and rental growth across prime offices, while the prolonged downward trend in portions of the retail sector also now appears to be easing.

“That said, given the current headwinds facing the UK economy in form of sharply rising energy prices, higher interest rates and general cost of living pressures, there is understandably a lot of caution regarding the potential impact this could have on market conditions going forward.”

Jonathan Hale, Head of Government Affairs at RICS, adds:

“UK commercial property is clearly still attractive to investors and UK Government should work across the country to engage with the sector to build on this positive outlook.

“The recent RICS commercial real estate impact report emphasised the key role that the commercial property sector currently plays in the UK and its future role in driving forward economic recovery across the UK.

“As town centres, high streets and offices start to recover following the pandemic, a thriving commercial real estate industry will be crucial to support the government’s levelling up and net zero ambitions in the months ahead.”

Warning: of course, all of this was in the last period: in these times of rapid economic changes things can turn around quickly. With a raging war in Ukraine, inflation approaching double figures and a threatened recession the picture may be less optimistic in 12 months’ time?

Full RICS survey report here.

*This data follows the publication of the RICS Commercial Real Estate impact report, which found that high-quality and well-managed commercial real estate is integral to levelling up UK towns and cities and contributing to better spaces and amenities for local communities. The sector’s contribution – across retail, office and industrial uses – makes up 3.3% of the total UK GVA, employs 3.5% of the total workforce and generates 2.5% of the UK tax revenues.

About RICS – Everything we do is designed to effect positive change in the built and natural environments. Through our respected global standards, leading professional progression and our trusted data and insight, we promote and enforce the highest professional standards in the development and management of land, real estate, construction and infrastructure.

Our work with others provides a foundation for confident markets, pioneers better places to live and work and is a force for positive social impact.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Office market weathering the storm better than expected | LandlordZONE.

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LATEST: New report reveals big jump in landlords facing rent arrears

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More than a third of landlords have experienced rent arrears during the past 12 months – a clear indication that the cost of living crisis is starting to hit home.

Paragon Bank’s latest Landlord Report shows that 36% had tenants in rent arrears which, although only based on a survey of 621 landlords, is a big jump from the most recent Household Resilience Study which found just 7% of private renters were in arrears during April-May 2021.

Damaging reports

Landlords have had to contend with a range of other issues too, with almost a quarter (24%) coping with property damaged by tenants, and as a result, 23% had to withhold all or part of a deposit.

Paragon also found that 13% suffered anti-social behaviour from tenants, 13% had sought vacant possession, 11% used legal services, 8% made an insurance claim, 4% experienced sub-letting and an unlucky 1% had squatters. Despite this, none of those 621 questioned had missed a mortgage repayment.

Good job

Landlords largely do a good job and most of their renters are happy, the report found, which found that 91% have a positive relationship with their tenants and 88% had been very or extremely flexible with tenant requests.

Research for a Social Market Foundation report, commissioned by Paragon, found that 81% of private renters are happy with their current property, and 85% are satisfied with their landlord.

Paragon Mortgages MD Richard Rowntree (pictured) says: “It’s interesting to see that considering how properties meet the needs of tenants is central to landlords’ investment strategy and more important than generating high yields or capital appreciation.

“This is perhaps at odds with the negative perception of landlords who are sometimes viewed as placing profits above people.”

Paragon also found that landlord demand for city-centre property was strong last year, with house purchase completions in urban postcodes increasing by 100% compared to the year before. Milton Keynes was the city with the highest buy-to-let completion growth (667%), followed by Manchester (300%) and Bristol (300%).

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: New report reveals big jump in landlords facing rent arrears | LandlordZONE.

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BREAKING: Grant scheme for air and ground source heat pumps opens for landlords

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The government has today officially opened its Boiler Upgrade Scheme for applications including those from private landlords.

Operated by the Department for Business, Energy and Industrial Strategy, it offers applicants it offers grants to encourage property owners to install low carbon heating systems such as heat pumps, it will now run until 2025.

Landlords can receive up to £5,000 off the cost and installation of an air source heat pump or £6,000 off a ground source heat pump and they are available as a single grant per property.

Air source heat pumps cost between £3,000 and £18,000 depending on property size and age, while ground source ones are more expensive, ranging from £15,000 to £45,000.

Eligibility for the scheme includes first and second homeowners as well as private landlords within England and Wales.

Participating in the scheme does not exclude landlords from applying for other grands such as separate funding for energy efficiency upgrades including insulation, doors or windows.

The only exclusions are properties that have already had government funding or support for a heat pump or biomass boiler, and those which have ab EPC that has includes a recommendation for loft or cavity wall insulation.

Also, hybrid heat pump systems, for example a combination of a gas boiler and air source heat pump, are not eligible.

A separate grant of £5,000 is also available for biomass builders, but only for rural or off-grid properties.

Landlords must first contact an MCS certified installer who will assess the viability and cost of a heat pump system and then apply on their behalf to have the £5,000 deducted from the cost.

The scheme is being managed by energy sector regulator Ofgem.

Kickstart

Phil Hurley (pictured), Chair of the Heat Pump Association, says: “An upfront financial incentive like this will not just help to kickstart the industry by making the technology more accessible but will also provide heating installers with the confidence boost they need to upskill.

“With the capacity to train 40,000 installers each year, we have made huge strides as an industry to improve the heat pump training pathway, and we are hopeful that this scheme will inspire the workforce to take up the opportunities available.

“Heat pumps represent a readily available and long-term solution to fossil fuel heating and the scheme is a big step towards kickstarting the mass rollout needed to grow the sector and put the UK economy on track to meet Net Zero.”

Find out how to get started.

Read our analysis of heat pump viability.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – BREAKING: Grant scheme for air and ground source heat pumps opens for landlords | LandlordZONE.

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Right to enter an empty leasehold flat in emergency?

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We are a newly formed right to manage company and the remedial works to the block due to the dreadful works by the developer have been huge. We have to recommission the heating system due to the wrong pressure and this needs access to one of the top floor flats.

View Full Article: Right to enter an empty leasehold flat in emergency?

3,374 BTL products still on offer to landlords but rates rising

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The Latest Moneyfacts market research indicates that although there was a small month-on-month dip in the number of Buy-to-Let (BTL) products available to landlords, reduced by 61 to 3,374, compared to this time last year, there are over 1,000 more BTL products available now.

View Full Article: 3,374 BTL products still on offer to landlords but rates rising

LATEST: Notorious property investment fraudster FINALLY jailed over £600,000 scam

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One of the UK’s most notorious property investment fraudsters has been jailed for six years after a court heard how he swindled investors out of £592,000.

42-year-old father of three John Keats-Ormandy persuaded eight people to invest in his scheme by claiming he had a portfolio of empty properties that needed to be refurbished to fulfil a contract with the Ministry of Defence to supply accommodation.

But it soon became evident that York-based Keats-Ormandy possessed neither and that he had no intention of fulfilling his part of the deal to generate income for his investors.

Several people entrusted their life savings with him and one of the victims was a cancer patient.

The case casts a light once more on the unregulated nature of the property investment sector within which fraudsters and rogue operators are free to make claims about their ‘opportunities’ without being registered, regulated or overseen – unlike most other areas of financial activity.

During the trial Keats-Ormandy’s barrister claimed his had not intended to defraud his victims but had instead ‘got in too deep’.

Proceeds of Crime

The investors are expected to see only £100,000 in total returned to them following a Proceeds of Crime Act hearing later this year.

“It’s great to see justice has prevailed,” says Vanessa Warwick of Property Tribes.

“Keats-Ormandy has been on the community radar at Property Tribes for many years, and we have numerous threads on him concerning the various schemes he has run that have relieved investors of their money.

“In the absence of any formal regulation, community-generated due diligence and warnings are the thin line between consumer protection and financial loss.”

This case follows last month’s news that another fraudster, Sam Eustace, recently stole nearly £7 million from investors.

Pic credit: West Yorkshire Police

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Notorious property investment fraudster FINALLY jailed over £600,000 scam | LandlordZONE.

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