Don’t let red-tape drive out good landlords
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A leading taxation advisory firm, Blick Rothenberg, warns today, there’s a distinct danger of turning the steady flow of landlords leaving the industry into a flood, if new relations due soon, and too much red tape, become overbearing for responsible buy-to-let landlords.
With the long-awaited draft Rental Reform Act, due to be published this week, the upgraded Bill under Michael Gove it is said will represent a “new deal for renters”.
Last month Boris Johnson announced that his government would “improve lives of millions of renters” and although these plans have been a long time coming, it seems they are finally to see the light of day in detail.
Things have changed says the government
The government argues that the private rented sector (PRS) has seen “significant shifts” over the past few decades with issues of quality, stability and affordability regularly highlighted in the media. The new proposals, re-announced in the Queen’s Speech last month, says the government, represent a long overdue change needed to bring the renter’s experience into the 21st Century.
A Renter’s Reform Bill
The Rental Reform Bill, first proposed under Teresa May in April 2019, is aimed at removing some of the insecurities tenants experience while renting in the private sector in England, but the Covid pandemic got in the way.
Announcing the plans, Mrs May said at the time:
“Everyone in the private sector has the right to feel secure in their home, settled in their community and able to plan for the future with confidence.
“But millions of responsible tenants could still be uprooted by their landlord with little notice, and often little justification.
“This is wrong – and today we’re acting by preventing these unfair evictions. Landlords will still be able to end tenancies when they have legitimate reasons to do so, but they will no longer be able to unexpectedly evict families with only eight weeks’ notice.”
The Rental Reform Bill re-introduced
Included in the Queen’s Speech in May 2022, Prince Charles read out that a Bill would be brought forward, promising “to strengthen the rights of tenants”, affecting landlords and will likely change things for 4.4 million private renters in England.
What are the likely changes?
We don’t know the full details of Michael Gove’s revisions to this Bill until they are announced this week, but rumours of giving tenants the legal right to have pets in rentals and the removal of the no-fault (no reason given) evictions are increasing landlords’ anxiety levels.
The main target for the reforms it seems is the long touted abolition of section 21 no-fault evictions.
Removing the section 21 clause from the Housing Act 1988, it is argued, will give more security for tenants in the PRS, giving tenants the power to challenge landlords who fail to maintain and repair, and who impose unfair rent increases, without the fear of a retaliatory eviction.
There will be among other things a drive to improve rental home living standards, using the Decent Homes Standard to be extended to the private rented sector for the first time, designed to give all renters the right to a safe and warm home.
A National landlord register
A national landlord register is proposed, similar the one in operation in Scotland, and the Bill is to create a new ombudsman for renters, independent agencies designed to deal with complaints against landlords – similar to the one in operation for letting agents – without the need to go to court.
A website designed to help tenants keep track of their landlord’s performance, and to hold them to account, was also included in the draft legislation.
Heather Powell, head of property and construction at Blick Rothenberg said:
“Renters need rights to ensure rogue landlords are required to provide safe, secure homes but it is critical the responsible landlords are not driven away from the sector”.
Her warning is in response to announcements on the Bill made by government so far, revolving around issues about radically improving renters’ rights, indications that scare many landlords who have put their life savings into providing buy-to-let type rental accommodation.
Blick Rothenberg is arguing that on the one key issue, the abolition of section 21, any new Rental Reform Act must ensure that buy-to-let landlords “have the right to repossess their properties when their situation changes, with appropriate notice to tenants.”
It is critical that on this one key issue any change does not result in responsible landlords being driven away from the sector, warns Heather Powell.
Falling rental property numbers
Recent figures produced by Propertymark in June (2022) show that the number of rental homes available to tenants have fallen in the UK, with only half the number of properties available to rent in March 2022 as at the same time in 2019.
Worryingly, over 80 per cent of landlords who are no longer active in the rental market have put their properties up for sale, prompting Ms Powell to warn of the critical danger that the Bill could “reduce the supply of good, safe rental properties” still further.
“Any reduction in the number of homes to rent is bad news for the UK economy as affordable accommodation is essential if employers are going to fill the 1.295mn job vacancies reported at the end of March 2022,” says Ms Powell
Some landlords have already been motivated to sell by a long series of tax reforms and increasingly onerous regulations. More recently, the urgent need to bring their properties up to standard to meet stringent energy efficiency standards is also taking its toll.
Further, Blick Rothenberg warns, pledges by the Labour party to increase tax on unearned income (buy-to-let investments are classed as unearned income by (HMRC) would have yet another devastating impact on the rental market.
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LSA warns landlords: Recession is coming
Recession is looming around the corner. It’s an unavoidable topic, and smart landlords are reacting fast. A report by Propertymark found a massive spike in landlords getting out of the rental industry and that 53% of buy-to-let properties sold in March 2022 left the private rented sector (PRS) completely. Landlord Sales Agency, a company which has grown to be one of the UK’s most trusted property portfolio sales companies warned that landlords could no longer avoid a decision they needed to start making now: sell before the recession and cost of living crisis hits prices and sales.
There’s no doubt that the time to act is now, and the sooner the better. Landlords cashing in now will not only get the highest price for their property portfolios, they’ll also avoid the legislation changes that will inevitably make holding onto a portfolio a huge financial drain. Experts are suggesting that even selling part of your buy-to-let property portfolio is a wise decision – “it’s the highest release of equity you’ll get for another 7 years, and you’ll need it to weather the storm,” advised David Coughlin, CEO of Landlord Sales Agency.
It’s precisely this trusted advice that has made Landlord Sales Agency specialists in selling rental property. Owned by two private landlords, who themselves have both successfully sold their buy-to-let properties and cashed in, they know exactly what to do to help other landlords. What’s more, they’re passionately on the side of landlords, with first-hand experience of getting landlords the most money possible out of their assets. They’re also extremely sensitive to tenant needs, ensuring that they sell the properties without landlords having to evict tenants at all, and with minimal landlord involvement. “Unlike other companies, we have a list of buyers who will buy your properties without having to evict tenants. This dramatically cuts down the time it takes to sell, plus means that you can continue collecting rent all the way up until the actual sale. For those properties that require evictions, we personally help your tenants relocate, or help them financially to find a new place. We understand how to navigate those relationships, so you don’t have to worry, even with tenants that have been in situ for years. We know exactly what to do to help them. Leave it to us.” They’ll take it all off your hands, and get you the highest price for your portfolios in less than 21 days. “We sell entire property portfolios, or partial portfolios in bulk in one go.
We’ve got an extensive list of over 30,000 private buyers and relationships with the top property buying companies. Most of our portfolios sell within a week.”
With strong relationships with established property industry giants such as LandlordZONE and Property118, it’s clear they’ve got the approval of the landlord community. “We’re about delivering speed, efficiency, and exceptional customer service. That’s what landlords need. With a recession just around the corner, we don’t have time to waste, and we need a company we can trust. I couldn’t find one out there, so I created my own, with a mission to help other landlords” said Landlord Sales Agency’s CEO, David Coughlin.
Landlord Sales Agency sell properties either in one go as a full portfolio or as single units, depending on your instruction. Unlike traditional estate agents, or other property buying companies, both methods are extremely fast. They work quickly to collect information about rent, tenant history, running costs and ensure all certificates are in place to guarantee the sale is not delayed. If any certificates are missing, they have a team of engineers, builders and experts who will get all the certificates and paperwork done for you. The stress is completely removed out of the sale, and seller involvement is kept to a minimum so you can relax knowing it’s in swift and extremely capable hands.
Furthermore, Landlord Sales Agency take their promise to ‘solve any landlord problem’ so seriously that, as a result of the number of enquiries they receive from landlords with cash flow problems, they can also use the equity tied into property to offer an interest free loan of up to £20,000 to be repaid on completion.
“We know what it’s like right now to be a landlord who is thinking of selling, and who wants to release cash. We’re so confident in what we do, we can afford to go the extra mile to really help landlords get through, and get the highest possible price for their property portfolio before the market drops.”
You’d think that for so much work, landlords would have to compromise on the sale price, but that’s not the case. “We typically achieve 80 – 90% of the market value, and for that we cover all the costs and take away all the hassle that comes with selling the portfolio. We’re completely transparent, so you know exactly what we’re making. You won’t get a higher price for the service, and any company promising you 100% market value is hiding a huge list of costs that are going to come after the sale. That’s not the case with us. It’s what makes us different.
We want to help, and we understand that now is the time for landlords to get out before the recession hits. It’s a crucial time, and we’re here to get the job done for you. We’ve found the solution for ourselves, it’s time to help you.”
If you want to exit the market before the predicted fall in property prices, talk to us today.
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iHowz Green Paper on the Future of the PRS
iHowz recently published their paper outlining proposals on the PRS in response to the Queen’s speech. With Michael Gove due to make an announcement on the government’s white paper, we wanted to highlight our proposals
Summary of Recommendations:
1.
View Full Article: iHowz Green Paper on the Future of the PRS
London council ‘pick up pace of enforcement’ as fines total £7.5m over past five years
London councils continue to batter rogue landlords and letting agents with penalty fines, pushing the total handed out to £7.5 million during the last five years.
In May, the total had risen by £300,000 in less than four months, however, this has slowed since last November when geospatial technology firm Kamma reported that fines increased by more than £1 million in less than a year as councils picked up the pace of enforcement efforts post-lockdown.
The average fine imposed on landlords for all offences is now £4,233 and £4,440 for letting agents – figures which have only gone up by about £20 in the last year, according to Kamma.
It says that while more record fines are given to landlords and agents, there are still many smaller fines handed out which keeps the average at a similar rate compared to last year.
Largest fines
The borough with the largest average fine rate is Hammersmith and Fulham with £19,800, while Camden tops the table for the highest number of cases brought since 2017 (418), followed by Newham (340) and Southwark (169).
Landlords and letting agents face fines of up to £30,000 for failing to comply with safety and licensing regulations, and additional fines of up to £5,000 per property for non-compliance with MEES regulations.
Property professionals need safeguarding tools in place to protect themselves and their customers from market and regulatory risks, says CEO Orla Shields (pictured), as the firm announces a new partnership with insurance brokers Mint Insurance. This aims to give its customers access to discounted offers on Kamma’s licensing compliance services and tools.
“We continue to seek out new partners that we know will further our mission and support us in helping agents reduce risks and increase regulatory compliance in the property sector,” adds Shields. “This partnership helps agents dramatically reduce their risks and does so in an operationally efficient way.”
Read more about fines in London.
©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – London council ‘pick up pace of enforcement’ as fines total £7.5m over past five years | LandlordZONE.
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Disability Access Consultation
Kemi Badenoch, Minister for Equalities and Levelling Up Communities, has released a consultation for regulations to make it a duty for landlords to respond to requests from disabled tenants wishing to make communal spaces outside their rental properties more accessible.
View Full Article: Disability Access Consultation
EPC exemptions after spending £10k?
I understand that should we be unable to achieve an EPC rated at C on a rental property and I’m thinking of one property in particular where the last EPC was done in 2018 when it was given an E.
View Full Article: EPC exemptions after spending £10k?
BREAKING: Government to give tenants ‘legal right’ to have a pet in their home
The Government is planning to give tenants the legal right to keep a pet as Ministers swing behind efforts to re-purpose the housing market towards ‘the consumer’.
These proposals will be within the long-awaited draft Renters Reform Act that, it is reported, Gove is to publish tomorrow.
This will include measures that will prevent landlords and letting agents enforcing a blanket ban on pets, which will have ramifications for both property adverts and software systems.
The Mail says property owners will need to have a ‘good reason’ to refuse permission for a tenant to have an animal in their home, and tenants will be given access to a mediation process should they feel a landlord’s refusal is not justified.
The Government will also change the law so landlords can require that renters to get insurance so any damage to their property is covered.
Pet friendly
Of the 4.4million households currently living within the private rented sector in England, just 7 per cent of landlords advertise their properties as being pet-friendly.
A Government spokesperson told The Mail: ‘Not only will our new deal for renters extend the decent homes standard to the private rented sector… we’ll also give tenants a legal right to have a pet if they wish. Would-be pet owners are being unfairly deprived of the company and companionship of an animal by their landlords – so we’ll change the law to end this unfairness.’
There will be protections for landlords within the Act, and tenants will still have a legal duty to repair or cover the cost of any damage to properties.
The news will be a huge vindication of Jen Berezai’s long-standing campaign through her AdvoCATS organisation to bring about the measures leaked today and expected tomorrow.
She says: “AdvoCATS welcomes the news that the DLUHC is including new rules on pet ownership in the private rented sector in the forthcoming renters reform white paper, and is pleased to see that one of the key proposals from our Heads for Tails! campaign, to stipulate pet damage insurance is held, has been adopted.”
©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – BREAKING: Government to give tenants ‘legal right’ to have a pet in their home | LandlordZONE.
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Refurbishment Buy to Let – A solution to EPC requirements
The proposed new Energy Performance Certificate (EPC) regulations will mean that from 2025, landlords cannot rent their property on a new tenancy without an EPC rating of C or above. It is proposed that the penalty for not having a valid EPC
View Full Article: Refurbishment Buy to Let – A solution to EPC requirements
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