Short-term rentals account for 7% of total housing in some areas

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Holiday-lets now account for as much as 7% of total homes across 15 of the nation’s most popular staycation destinations, with just one seeing a decline in holiday-let property market prominence, research reveals.

The findings come from the estate agent comparison site

View Full Article: Short-term rentals account for 7% of total housing in some areas

LATEST: Rogue landlord banned from letting properties in England for 15 months

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A landlord in Coventry has been given a national ban from letting property in England after being convicted of multiple and serious contraventions of housing legislation.

Carmelo Borsellino, of Cheveral Avenue, Coventry, has a long history of poor property management and the local council has been chasing him down for several years in a bid to rein in his activities.

His most recent conviction was on 14 July 2021, at Coventry Magistrates’ Court, where he was found guilty of offences relating to the Management of Houses in Multiple Occupation (England) Regulations 2006 at 12-14 Lower Ford Street, Coventry CV1 5QJ (pictured).

Borsellino pleaded guilty and was fined £1,350 for this offence and ordered to pay a victim surcharge of £135.

But, due to the seriousness of these offences, Coventry City Council took the decision to apply to the First Tier Property Tribunal for a banning order, which was heard in June.

The Tribunal has now issued a banning order on Borsellino preventing him letting property in England for a period of 15 months, saying that they were “unimpressed with Mr Borsellino’s attempts to avoid or diminish the seriousness of having been convicted in relation to fire safety breaches”.

Prison sentence

Should he breach the banning order, the landlord could receive a prison sentence of up to 51 weeks or a fine of up to £30,000. His name has been added to the national rogue landlord database.

Read: the complete guide to HMO management.

“Offences of this nature are very serious and have the potential to undermine Coventry City Council’s work to ensure that rented housing within its locality is safe and suitable for tenants,” says Adrian Chowns (pictured), Property Licensing and Housing Enforcement Manager for the city.

“The use of banning orders is just one of the many tools the Council is adopting to tackle rogue landlords and deter them from flouting their responsibilities.”

Read more about Coventry HMOs.

View Full Article: LATEST: Rogue landlord banned from letting properties in England for 15 months

Comment: is Government legislation killing the buy to let landlord?

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For years now, what would appear to have been successive waves of anti-landlord legislation have been bearing down on buy to let, but will this change under a new prime minister?

From George Osborne to Rishi Sunack, the Treasury, it would seem, has been milking the buy to let landlord for all its worth.

Announced in 2015 by George Osborne, and coming into full force in April 2020, Section 24 of the Finance Act 2015 restricts all income tax relief on property finance costs to the basic rate of 20%.

Add to this the 3 per cent stamp duty surcharge and the removal of the 10 per cent depreciation allowance on expenses, and it represents a drastic reduction in the amount of tax relief landlords, and particularly those high rate taxpayers with mortgages, can receive, compared with the previous regime.

Soaring house prices have mean that the Treasury now collects the highest amount of capital gains tax (CGT) on record. Tax paid on capital gains soared over 40 per cent to reach more than £14bn in the 2021-2022 tax year. Ten years ago this tax take was less that £4bn. Over 300,000 landlords paid the tax during the tax year, averaging around £44,000 each.

What’s more, a series of Secretaries of States for Housing – coming under their department’s current incarnation as the Department for Levelling Up, Housing and Communities (DLUHC) – have been steadily adding to the legislative load, regulations that govern letting, with the biggest step change yet to come, possibly next year – through the Renters Reform Bill.

Furthermore, the Department for Business, Energy & Industrial Strategy imposes yet more serious financial obligations – in some cases it will mean spending up to £15,000 on upgrades – on the private residential landlords with its Minimum Energy Efficiency Standards, MEES regulations in the private rented sector.

As part of the proposals on energy efficiency there is a target for all residential properties, not just buy to lets, to meet EPC band C by 2035. There is also a target for mortgage lenders to have an average band C across their lending book by 2030, but there are current Government proposals to bring the EPC band C rating requirement forward to 2025.

The pressure is too much for some

All these things considered, with the coming cost of living crisis and increasing interest rates, its hardly surprising that some landlords are finding the pressure on them is too great and they are considering selling-up. The consequence of this is reducing the number of rentals on the market at a time when demand for renting has never been greater.

The net result of all of this in turn is the hiking of rents to a level that becomes unaffordable for many. The surge in capital gains tax payments and a rapid rise in evictions claims are perhaps indicators of the so call “landlord flight”, as experts argue it is all due to landlords who are abandoning the private rented sector.

Not all doom and gloom

It’s not all bad news of course. A buy to let investment still returns, on average, far more that you can get in a building society and most other forms of investment, plus it gives one of the best hedges against inflation – property is a truly valuable and readily available asset class to give you this protection, when you consider inflation is set to hit 13 per cent later this year.

The tax hikes can be off-set to a large extent by incorporating your landlord business, though this does not suite everyone, so get professional tax advice before you enter into this. And landlords can mitigate a large part of the expense by learning to manage their own rental properties – managing tenancies is not by any means rocket science – with a little bit of study and some experience, private landlords are every bit as competent as the average letting agent.

The repair state of the property should be every landlord’s concern and no one should go into the lettings business with inferior or dangerous properties. Making sure your properties meet the latest standards should be a top priority from day one, and by making your property energy efficient, it means your tenants reap the benefit in lower energy bills and you will market your rentals more easily.

But there are still clouds on the horizon

The Renters Reform Bill promises the biggest step change to buy to let in England for 40 years. The removal of section 21, which effectively ends the regime of the short-hold tenancy, removes the changes introduced by the Thatcher government in 1980. Instead of an assured shorthold, tenancies revert to assured tenancies (AT) where the tenant has pretty much full security of tenure, not too far removed from the “Rent Act” regulated tenancies.

That’s not to mention the removal of fixed terms, which means tenancies can run indefinitely unless the tenant seriously breaches the contract, whereas the tenant can leave with a short notice. This will bring turmoil to the student lettings market, where landlords will not be in a position to let to a new academic year of students in advance, not being sure the current cohort will leave.

Is the course set?

The big question for landlords is, under a new premier, and with the architect of the Renters’ Reform Bill Bill having been fired by Boris Johnson, will there be a last minute change of course with the Bill?

View Full Article: Comment: is Government legislation killing the buy to let landlord?

State funding for private tenants to buy their homes? It’s ‘pie in the sky economics’

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The recent report from the Joseph Rowntree Foundation (JRF) calling for the Government to provide private renters with a right to buy the property they live in is a further example of ‘pie in the sky’ economics says a leading property firm.

DJ Alexander, the largest estate and letting agents in Scotland, says proposals such as this do nothing to help people get on the property ladder and are more likely to exacerbate housing shortages rather than relieve them.

The report suggests the government should be “supporting renters to buy the home they live in, including through a Right to Buy for private renters.”

It also calls for the Government to intervene in the mortgage market and discourage lenders from providing funds to landlords and property investors – something one building society has already taken up.

“This makes no sense at all,” says David Alexander, chief executive of DJ Alexander.

He argues that tax payers should not subsidise renters to purchase the property they live in because then everyone who “wasn’t a renter should also be supported to buy their home. You can’t subsidise one part of the market and not the rest”.

 “Aside from being hugely inflationary it also fails to understand that a lot of people are happy to be in the private rented sector.

“The private rented sector is an essential element of the housing market and any proposals to reduce its scale should be looked at with caution.

Key mistake

“The other key mistake in the logic of this JRF report (pictured) is that they misunderstand the role of landlords.

“These are people who own properties which they rent to tenants. They are not obliged to provide this service but do so as an investment. They can just as easily withdraw from the market and invest their money elsewhere.”

“A tenant buying a property from a landlord doesn’t need government intervention as it can already happen, it just requires a willing landlord and for the tenant to pay the market value. The JRF seem to be assuming that market conditions don’t exist in property but exist in all other aspects of life.”

View Full Article: State funding for private tenants to buy their homes? It’s ‘pie in the sky economics’

Do we need a database of rogue tenants?

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Hello everyone, I am going to respond to the government’s White Paper consultation.

Firstly, there appears to be less support for PRS landlords than we had been led to believe the new Bill would offer.

As someone with a small portfolio

View Full Article: Do we need a database of rogue tenants?

Properties Urgently Required – Exclusive P118 members deal

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Lettingsupermarket.com™ urgently requires stock having let 80 properties in the last 4 weeks.  We have huge tenant demand and a list of 1000+ tenants who have registered their interest in the last 4 weeks.

Exclusive to new property118.com clients Lettingsupermarket.com™ is offering 3 months of free management on all properties let on the full management package at just 5% + Vat (£6%).  

View Full Article: Properties Urgently Required – Exclusive P118 members deal

TRENDS: Landlords in Outer London and South report surge in demand for rental property

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The UK economy might be on the verge of tanking, but London and the South’s private rental sector is on fire, latest figures show.

Landlords with properties being marketed for rent in suburban London have reported a big surge in demand over the past three months, a survey has reported.

Lender Paragon says a survey of landlords in outer London it underook revealed that 85% said tenant demand had stiffened, up from 79% during the previous three months.

The survey also suggests that London’s rental market is recovering in the more affordable outer suburbs, and has caught up its Home Counties counterparts where 90% of landlords told Paragon they had seen ‘strong’ demand among tenants.
The research, carried out among some 700 landlords by BVA BDRC, also reveals that the incidence of voids has fallen dramatically since the same period a year ago.

Voids avoided

In Q2 2021, 35% of Outer London landlords said that they had experienced an empty property within the last three months, the second highest region behind the North East.

A year on, Q2 2022 has seen this figure fall to 21%, with only landlords in the West Midlands less likely to have reported a void.

Richard Rowntree, Paragon’s mortgage MD, says: “We know that the private rental market in London was hit particularly hard by the Covid pandemic but has rebounded strongly since and these latest figures provide further evidence of this.

“As one of the world’s greatest cities, London is extremely dynamic, constantly evolving as a diverse mix of people come and go, calling it home as they study, work, travel or raise families.

“This is why it is important for the capital to have a thriving PRS, enabling people to benefit from the flexibility that rented homes provide.”

View Full Article: TRENDS: Landlords in Outer London and South report surge in demand for rental property

Rental reform should not be distracted by leadership race

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Rental reform should be the focus of any debate about property in the leadership race to find the next Prime Minister, the Association of Independent Inventory Clerks (AIIC) says.

The AIIC’s chair, Daniel Evans, said: “The latest chaos to surround Westminster could overshadow and delay the introduction of rental reform

View Full Article: Rental reform should not be distracted by leadership race

EXPERT REACTION: What will the base rate rise mean for the property market?

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Yesterday’s decision by the Bank of England to raise its base rate to 1.75% has led many economists to predict a recession in the offing as the bank attempts to control rampant inflation.

While this will make some landlords’ variable rate buy-to-let mortgages more expensive, and impoverish some tenants who are heavily in debt, it should be noted that lenders do not always pass these rate rises on either immediately or directly.

Millions of landlords are protected from rate rises by their fixed rate mortgages, and recent rises in rents mean many have seen increased income from their properties.

But what might this rate rise mean for the wider property market. We canvassed some expert opinion from within the property industry.

Trevor Abrahmsohn of Glentree International

“Thank the Lord that the BoE has at last ‘woken up and smelt the coffee’ by raising the interest rate to 1.75%. 

“With inflation predicted to peak at 13.3% in October, even at this low rate by comparison, will not, I fear, have much effect on the inflation rate.  They are going to have to crank it to 4 or 5% in order to make a dent.

“But I have to say that despite the looming storm clouds of recession and stratospheric energy costs, the property market is still reasonably buoyant, and carries a shortage of supply which will underpin prices. 

“This latter data is the bellwether of the market and as soon as supply exceeds demand, prices will inevitably fall.

“I think the top of the market will be seen as the summer of 2022 and at best, values will level pay and at worst, will fall.”

Jason Tebb, Chief Executive Officer of OnTheMarket.com

“This latest rate rise was widely expected, given continued high inflation, but we don’t expect it to quash positive buyer and seller sentiment in the housing market. 

“As stock levels continue to tick up, we are gradually moving towards a more rebalanced market in terms of supply and demand. Yet this will take time and until then, the ‘new normal’, an elevated version of the pre-pandemic market, continues.”

Nicky Stevenson, MD of Fine & Country

“Previous interest rate rises have failed to dampen growth in Britain’s red-hot housing market — but today’s hike is the biggest in more than a quarter of a century and will of course be painful for many.

“For those on standard variable rates, the arguments in favour of switching to a fixed deal have never been more compelling. Fixing rates now will allow you to insulate yourself against further rises for years to come.”

Marcus Dixon, Director of UK Residential Research at JLL

“The Bank of England continues to walk a challenging tightrope, one which some say it stepped onto too late.

“Global economies continue to struggle with rising inflation, a combination of demand returning following the lifting of covid restrictions alongside the implications on food and fuel costs following the war in Ukraine.

“The Bank of England alongside many global banks is responding by increasing rates in an attempt to counter inflation.”

Anthony Codling, Twindig

“As widely anticipated, the MPC decided to raise Bank Rate by 50 basis points from 1.25% to 1.75% today as the Bank of England gets tough on inflation and the causes of inflation, seeking to control inflation through the use of monetary policy.

“We expect that this latest 50 basis point rise in Bank Rate will feed through to mortgage rates in September.

“These rises are likely to increase floating mortgage rates and standard variable rates by half of one per cent (50 basis points).

“If your floating rate is 2.50% today it is likely to be 3.0%in September leading to an additional monthly mortgage payment of £25 per month for every £100,000 borrowed.”

Walid Koudmani, chief market analyst at XTB

“We saw investors sell out of their pound sterling positions in reaction to the UK’s biggest interest rate hike in 27 years.

“The hike itself was widely expected but the moods of GBP investors dampened from the negative rhetoric from the Bank of England itself on the UK’s economic outlook.

“The UK central bank expects the UK economy to shrink in the final quarter of this year and suffer from a recession for all of 2023. This marks a stark turn in their projections.”

View Full Article: EXPERT REACTION: What will the base rate rise mean for the property market?

‘Trophy Mansion’ owned by bankrupt property guru repossessed by bank

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The next chapter in the troubling story of property guru Glenn Armstrong has begun after court records have revealed that the infamous £3m seven-bedroom ‘trophy mansion’ he often used within his marketing effort has been repossessed by bailiffs.

The 62-year-old’s now former home, in which he and his wife lived for several years, had also been occupied until recently by a ‘tenant’ and business partner, but now the trio have left the premises.

A video reportedly filmed by bailiffs as they toured the huge luxury detached mansion in Newport Pagnell late last month shows brochures for his Property Millionaire Academy strewn around one room, while other parts of the house contain personal items including a child’s dollhouse, clothing and even a pair of his shoes.

The video suggests that whoever was living there departed in a hurry. The freezer remains fully stocked and the detritus of a final meal is evident on the work surfaces.

In February 2021 Armstrong was declared bankrupt after it was revealed that he owed creditors £4.9 million.

His bank accounts were frozen and an insolvency practitioner – Begbies Traynor – has spent months going through his affairs; 38 creditors were listed in the court papers, each looking to claim back sums of up to £537,000.

In February Begbies Traynor invited creditors to contact them ‘to prove their debts’, suggesting some monies may be returned.

Bank of Scotland

But one major creditor, the Bank of Scotland, who had given Armstrong a mortgage on the mansion, has now moved to recoup its money via the repossession of the mansion, called Carisbrook House.

The legal move is the final act in a sad play, particularly for the 40+ creditors who have lost considerable sums after being persuaded by Armstrong’s marketing – which featured his mansion prominently – to invest in projects he backed.

It also featured in a 2017 interview with him by Property Pillars TV (pictured, right)

Channel 4 may also be ruing the day it featured Armstrong within both its How the Other Half Live and The Secret Millionaire programmes during the late noughties, lending him much credence as a bonafide businessman.
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View Full Article: ‘Trophy Mansion’ owned by bankrupt property guru repossessed by bank