‘Selling properties with tenants in situ is best way to reduce Section 21 evictions’

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Instead of abolishing Section 21 the government should encourage landlords to keep their tenants when they sell rather than via ‘vacant possession’, a leading landlording expert has claimed during a podcast with TV star Phil Spencer.

Property Tribe’s Vanessa Warwick (main pic) suggests encouraging the sale of tenanted properties so that renters can remain in their home, which would answer negative rhetoric about forced homelessness from tenants’ groups.

Speaking to TV’s Phil Spencer on the Move iQ Property Podcast, Warwick said: “Estate agents always recommend vacant possession, but you can still get a very fair price with a tenant in situ if you sell to another landlord.”

The pair were discussing ways to stem the number of frustrated landlords leaving the sector, and Warwick also suggested that giving landlords back tax relief taken away by Section 24 of the Finance Act would immediately turn on the tap of available properties.

Problems

Problems were being exacerbated by central government not understanding the sector, said Warwick, who added that the cost of living crisis affecting tenants and resulting rising rents as stock dwindles would result in something cracking.

“There’s a massive disconnect, with the Government trying to deter landlords and force them out, and local government screaming for landlords as they don’t have enough social housing so they have to discharge their housing obligations into the PRS,” she said.

Spencer said: “The government were previously making changes to make it less attractive to be a landlord as they felt a lot of landlords were mopping up properties that would have been bought by first-time buyers, like one and two bed flats.

“I understood that, but now they’ve gone far too far and not many landlords are getting in and those that are in are getting out.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – ‘Selling properties with tenants in situ is best way to reduce Section 21 evictions’ | LandlordZONE.

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2.3 million rented homes in fuel poverty ‘by end of year’, landlords are warned

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More than 2.3 million households in the private rented sector could be in fuel poverty by the end of the year, according to new research.

Geospatial technology firm Kamma says the sector will be hit hardest by the energy price cap increase which could see fuel poverty hit 42% of private rental households. However, while the social sector has been able to more than halve fuel poverty in the last 10 years – from 40% to 18% – it’s only reduced in the PRS by a third, from 36% to 25%.

This reduction in the social sector has been prompted by the £3.8 billion Social Housing Decarbonisation Fund, but there is no equivalent available to support fuel-poor tenants in the PRS.

Kamma says the sector’s fragmentation also continues to be a major barrier to change, with more than 2.65 million individual landlords struggling to navigate the support options available, and councils struggling to regulate them.

Motivated

They have either not been able to, or are not motivated enough, to improve energy efficiency for their tenants meaning that 64% are at Energy Efficiency Rating D or below, compared to 42% in the social sector.

It believes the UK government could reduce fuel poverty by 56% if it spent its £9.1bn Energy Bills Rebate on energy efficiency upgrades for the households most in need, including those in the PRS.

Kamma’s analysis shows this would prevent more than three million of the poorest households from falling into fuel poverty.

CEO Orla Shields (pictured) adds: “The lack of accessible financial support for private landlords trying to implement energy efficiency upgrades has resulted in high levels of fuel poverty in the sector.

“To close the fuel poverty gap between the different housing sectors, a new approach is needed that not only targets those in social housing but also focuses on the ones most in need across all sectors.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – 2.3 million rented homes in fuel poverty ‘by end of year’, landlords are warned | LandlordZONE.

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Transfer of equity with partner not spouse and SDLT?

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I own a BTL property in my sole name and intend to transfer the title into joint names with my partner and transfer a small percentage of equity (10-15%). We are not married so it’s not a transfer between spouses.

View Full Article: Transfer of equity with partner not spouse and SDLT?

Rent affordability improved last year by nearly 1%, latest figures reveal

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An annual report into rental affordability has revealed that tenants were paying a lower percentage of their salaries in rent during 2021 than the year before.

The latest rental affordability index from BTL mortgage broker Paragon covering 2021 reveals that across England people on the national average salary of £30,264 paid 32.1% of their wage to a private landlord.

But the firm’s previous report for 2020 shows that a tenant earning the national average wage was paying 32.8% of their salary or a reduction of nearly 1%.

While this is not a seismic shift in renting costs, it highlights how claims by some campaigners that rent affordability has been ‘out of control’ are wide of the mark.

Improving since 2013

The Paragon data also echoes the official ONS statistics which shows that affordability has been improving in recent years as salary increases have outpaced weak rent rises.

The most recent ONS report says: “For most regions, private rental prices have become slightly more affordable since 2013, as the proportion of income required to rent in 2020 was less than in 2013.”

But campaigning groups such as Shelter and Generation Rent are correct on two aspects of rent increases within the PRS.

One is that affordability in London and the South of England has reached worrying levels. The Paragon report says someone earning the average wage of £36,326 in London will pay 50.2% of their post-tax salary on rent, and 36.1% if they live in the South East.

And the current crisis in the PRS, which has seen landlords exiting the market as tax breaks have been withdrawn in recent years while on the other hand unaffordable ‘for sale’ properties have grown the tenant population, have spurred on large increases in recent months, adding to the cost of living crisis.

The ONS recent revealed that the average rent for a tenancy in England is £755, recorded between October 2020 and September 2021, the highest ever recorded.

“The lower purchase prices for homes in regions such as Yorkshire and The Humber means that investors can keep rent prices relatively low while still covering their overheads,” says Richard Rowntree (pictured), MD Of Paragon Bank.

“It’s important to acknowledge, however, that there is a limit to this, and the current economic conditions mean that it is becoming more expensive to manage a lettings business. Alongside supply of properties that is exceeded by demand, this is placing pressure on rents.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Rent affordability improved last year by nearly 1%, latest figures reveal | LandlordZONE.

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CGT on selling a share of my Buy to Let?

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I need to raise some finance shortly and one of the options I am looking into is to sell 2/3rds and retain 1/3rd of a freehold BTL property I’ve had for 20 years.

Going forward the house will remain tenanted and we will split the rent 3 equal ways

View Full Article: CGT on selling a share of my Buy to Let?

Can I index link rents into my tenancy agreements?

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Hi all, I have just been talking to a fellow landlord and in the discussion, the question and idea came up can we index link the rent into an AST contract?

The next question is if this indexing clause was possible in the contract would you still have to serve a rent increase notice to the tenant and what would be the best option to link it to eg.

View Full Article: Can I index link rents into my tenancy agreements?

Landlord warns investors after JV ‘opportunity’ leaves him nursing £300,000 loss

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A landlord who lost £300,000 when a joint venture deal went sour wants his experience to serve as a warning not to take potential property investment partners at face value.

Rehman Akhtar (main pic), who currently lives in Saudi Arabia, had amassed a portfolio of around a dozen buy to lets in various locations around the UK, as well as properties in Bahrain, the UAE and Malaysia.

After attending property training courses he became a middleman, sourcing investors for UK developers looking for funds, he tells expatpropertystory.com.

Akhtar was invited to invest £300,000 in a development project in Doncaster by a well-known property trainer, with the assurance it would return a 30% profit in 12 months – not realising that there were already two other investors involved.

When the builders ditched the project, having built up about £650,000 worth of debt, the other two investors repossessed the property, sold it at auction and made just enough money to pay themselves off.

Life savings

The sunk deal has drained his life savings and he is now selling all the UK properties to pay back his investors’ money. Akhtar says he’s learned not to make big decisions alone.

“Use mentors, use friends and colleagues, use lawyers,” he suggests. “Even if I had spent £1,000, or £2,000 on a good lawyer to analyse this deal or a good accountant, that would have been money well spent.”

He advises others to ask potential partners whether they are the only investor in the deal.

“Ask if they have had any deals go bad before, if they had any projects that didn’t quite complete and if you can talk to five other investors that they’ve worked with.”

Akhtar adds: “Do not be afraid to say no. Just because you get on well with that person…especially with JVs, as soon as you hand that money over the fence to the developer, your power is lost.” 

Read more about JVs.

Listen to a podcast interview with Rehman Akhtar.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Landlord warns investors after JV ‘opportunity’ leaves him nursing £300,000 loss | LandlordZONE.

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‘Rent To Rent’ Millionaires

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In my 30+ years of investing into UK rental property I’ delighted to have met 1,000’s of people who have made their millions doing he same things as me.

I’ve also met more than a handful of people who have made their millions by educating newbies to the property investment business as a result of sharing their ‘Rent To Rent‘

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Journalistic Support Required

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Believe it or not, the vast majority of the News articles you see on Property118, together with Readers Questions, Social Media Posts, Daily Newsletters, Weekly Roundup Newsletters and comment moderation are dealt with in between other tasks performed by just one person

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KERCHING? Buy-to-let outperforms stocks, bonds and gilts over past 10 years

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Buy-to-let property delivers better returns than stocks, bonds and gilts over a 10-year period, according to new research.

Analysis by AJ Bell reveals that the best stock deal would pocket investors £31,833, gilts and bonds produces £23,693, while those who choose to keep their cash in savings would see an even poorer return of just £3,082.

On the other hand, Private Finance reports that a landlord investing £50,000 would make a profit of £54,106 from rent, plus a further £39,079 from capital growth, delivering a total profit of £93,185 over 10 years.

The world’s markets have been highly volatile since the start of the pandemic, suffering losses in the trillions of dollars. 

They took another major nosedive when Russia invaded Ukraine and the resulting fuel wars and uncertainty have caused stocks and shares to continue under-performing this year. 

Quit

However, the buy-to-let sector presents its own challenges, as rising costs, tax changes and potential regulatory changes are prompting growing numbers of landlords to quit.

Nine out of ten landlords expect rising interest rates and inflation to have an impact on the cost of maintaining their property investments, according to recent research from GetGround, which found that more than half of landlords expected costs to jump between 25%-50%.

Daniel Jackson, sales director of Sequre Property Investment, believes Covid has prompted a revival in buy-to-let market investment thanks to Rishi Sunak’s stamp duty holiday, steadily rising average rents levels, increasing property values and low mortgage interest rates. 

“This trend is likely to continue with house prices predicted to rise steadily through 2022 and rental yields achieving more than 8% in some parts of the UK, particularly the Midlands and North East and West,” he predicts.

“These statistics show what we and our investors have always known – that long-term property is a far stronger and more resilient investment than other asset classes.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – KERCHING? Buy-to-let outperforms stocks, bonds and gilts over past 10 years | LandlordZONE.

View Full Article: KERCHING? Buy-to-let outperforms stocks, bonds and gilts over past 10 years