LATEST: City makes next move to implement huge new HMO restrictions

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Coventry council has taken its next step towards a huge new scheme that will prevent properties being converted in HMOs without full planning permission.

Eleven out of 18 wards within the city will be covered including Foleshill, Radford, Sherborne, St Michael’s, Earlsdon, Lower and Upper Stoke, Cheylesmore, Wainbody, Westwood and Woberley (see map).

The plans, which were first announced in xxx, will now be put to a full Cabinet meeting on the 30th of August after which a public consultation will take place and implementation most likely next year.

A council report on the proposals makes it clear that it wants to prevent any “unnecessary and avoidable displacement of families searching for properties and provides opportunities for those looking to get onto the property ladder by limiting the number of HMOs in certain wards and ensuring that they are not located so closely together”.

Control numbers

Cabinet Member for Housing and Communities, Councillor David Welsh (pictured) says: “We want to manage the development of HMOs across Coventry and especially in areas of the city where we need to have the ability to control their numbers.

“Housing developments must meet housing need in the city. We need good quality affordable homes for families, we believe this will help improve neighbourhoods.”

Deputy Cabinet Member for City Services, Councillor Gavin Lloyd, who is also a Sherbourne Ward Councillor, adds: “Whilst HMOs are an integral part of the community, as they provide housing to students and young professionals who house share, by controlling the number of them throughout the city – and particularly those in the most saturated areas – we’re supporting residents and accommodating the housing needs of the many, not the few.”

View Full Article: LATEST: City makes next move to implement huge new HMO restrictions

Tenants frustrated by lack of communication with letting agents

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Many tenants say they feel ignored by their letting agent, with delays in responding to problems being the most common complaint, research reveals.

Researchers questioned 2,000 tenants and found that 31% of those who tried to contact their letting agency with an out-of-hours emergency didn’t receive a response.

View Full Article: Tenants frustrated by lack of communication with letting agents

House prices AND inflation rose in June

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The UK’s average house price increased by 7.8% in the year to June 2022, the latest data from the Office for National Statistics (ONS) reveals.

And the ONS has also announced that the rate of annual inflation to July has hit double digits –

View Full Article: House prices AND inflation rose in June

EXCLUSIVE: Landlords battle city council over HMO council tax re-valuations

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Portsmouth’s HMOs are in the firing line again as growing numbers are being referred to the Valuation Office Agency (VOA) to have their council tax bands reassessed.

Rather than paying tax on the whole property, each room can be classified as a band A at a cost of £1,200, with tenants able to apply for a 25% single-person discount, taking the bill to £900 for each resident.

Tenants have even been charged back-dated council tax, meaning that some owe more than £3,000 without even realising, particularly if they’ve already moved out, according to the Portsmouth & District Private Landlords Association.

Although the practice was brought in to deal with commercial units being converted into residential properties, chairman Martin Silman suspects the council is referring each HMO that comes through its planning system. He says at last 12 members have been recently affected, as well as a local councillor who lives in an HMO.

“A member was told by the VOA that it was getting a lot more referrals than anywhere else in the country, so we’ve put in a Freedom of Information request as we’re hoping to get some answers,” Silman (pictured) tells LandlordZONE.

“Unfortunately, tenants will end up footing the bill, pushing up the lowest rents in the city which in turn will push all the city’s rents up, along with house prices.”

Chris Ward, Portsmouth Council’s director of finance, says he recognises landlords’ concerns and that the council is not deliberately seeking to ‘disaggregate’ council tax bills for HMOs.

He tells The News: “The council has no role in determining the council tax band of properties in the city, or when any changes should be effective from. This is the responsibility of the Valuation Office Agency which then informs the council. We are then obliged to bill the council taxpayer from that date.”

This summer, the city has been consulting on plans to introduce additional licensing for smaller HMOs which the landlord group believes will drive more out of the market, push rents up and create homelessness.

View Full Article: EXCLUSIVE: Landlords battle city council over HMO council tax re-valuations

EXCLUSIVE: Landlords battle city council over controversial council tax re-valuations

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Portsmouth’s HMOs are in the firing line again as growing numbers are being referred to the Valuation Office Agency (VOA) to have their council tax bands reassessed.

Rather than paying tax on the whole property, each room can be classified as a band A at a cost of £1,200, with tenants able to apply for a 25% single-person discount, taking the bill to £900 for each resident.

Tenants have even been charged back-dated council tax, meaning that some owe more than £3,000 without even realising, particularly if they’ve already moved out, according to the Portsmouth & District Private Landlords Association.

Although the practice was brought in to deal with commercial units being converted into residential properties, chairman Martin Silman suspects the council is referring each HMO that comes through its planning system. He says at last 12 members have been recently affected, as well as a local councillor who lives in an HMO.

“A member was told by the VOA that it was getting a lot more referrals than anywhere else in the country, so we’ve put in a Freedom of Information request as we’re hoping to get some answers,” Silman (pictured) tells LandlordZONE.

“Unfortunately, tenants will end up footing the bill, pushing up the lowest rents in the city which in turn will push all the city’s rents up, along with house prices.”

Chris Ward, Portsmouth Council’s director of finance, says he recognises landlords’ concerns and that the council is not deliberately seeking to ‘disaggregate’ council tax bills for HMOs.

He tells The News: “The council has no role in determining the council tax band of properties in the city, or when any changes should be effective from. This is the responsibility of the Valuation Office Agency which then informs the council. We are then obliged to bill the council taxpayer from that date.”

This summer, the city has been consulting on plans to introduce additional licensing for smaller HMOs which the landlord group believes will drive more out of the market, push rents up and create homelessness.

View Full Article: EXCLUSIVE: Landlords battle city council over controversial council tax re-valuations

Top 5 landlord questions on mortgages answered

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In December 2021, the Bank of England put up its base interest rate for the first time since the start of the pandemic, when it was dropped to a historic low of 0.1%. This year it has been increased several more times and this is expected to continue.

When the base rate rises – and particularly when inflation is high as it is currently – mortgage interest rates usually follow suit, to ensure that lenders can continue to cover their own increased costs.

As a landlord, here are 5 questions you might be asking right now:

What kind of buy-to-let rates are available at the moment?

Generally speaking, most landlords go for fixed, interest-only deals. While there are other factors to consider – including fees, early redemption penalties, and the standard variable rate when the fixed term ends – here are some headline figures for deals available as at the end of July 2022:

Are mortgage rates likely to go up further?

Unfortunately, yes – it currently sits at 1.75%. Experts are suggesting it could eventually reach 3% or even higher if inflation continues to rise in the UK.

Is now a good time to switch mortgages?

We’d suggest that unless you moved onto a new 5-year fixed deal within the last couple of years, it’s definitely worth trying to lock in current rates before they go up again.

Do I need to use a mortgage broker or can I go direct to a lender?

Although you may be able to secure a good deal for a standard residential mortgage by going direct to a lender – especially if it’s your own bank – that’s not generally true with buy-to-let mortgages. That’s because around two-thirds of BTL products are only available through brokers, so you won’t even find them on comparison sites. If you’re looking for a fixed-rate deal or a LTV of 80% or more, around 75% of those types of mortgages are broker-only.

It’s a good idea to review your mortgage every six months, with a broker like Mortgage Scout, as lenders tend to change their deals and may introduce new ones.

Is it better to own investment properties with cash or a mortgage?

Owning your home outright can be hugely beneficial. You don’t have the cost of monthly mortgage payments and the equity gives you a great deal of financial security and options for the future. However, with buy-to-let, you should be considering the financial return on your investment and leveraging the bank’s money via a mortgage can boost your capital returns significantly.

Here’s a simplified example:

• You own a BTL property worth £200,000 outright. If the market rises by 10%, you’ve made £20,000 – a 10% return on your £200,000 capital invested.
• If you owned the same property with a 75% mortgage, that £20,000 rise in value is a 40% return on your £50,000 capital invested. You’re benefitting from the profit on not only your own money, but the bank’s money as well!

You do have to consider the monthly mortgage payments which will reduce your ongoing rental profits, but the rise in the capital value of the property over time should more than compensate. That’s why buy-to-let is most successful when it’s treated as a long-term investment strategy.

There is no guarantee that it will be possible to arrange continuous letting of the property, nor that rental income will be sufficient to meet the cost of the mortgage.

Your property may be repossessed if you do not keep up repayments on your mortgage.

There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1%, but a typical fee is 0.3% of the amount borrowed.

MAB 14307

View Full Article: Top 5 landlord questions on mortgages answered

INVESTIGATION: Exasperated landlord warns others not to use unlicensed evictions firms

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An exasperated landlord in North London is warning others to beware of unregulated eviction companies after paying one £2,000 – but has yet to evict her tenants two years later.

The elderly landlord used Tenant Eviction 21 Co Ltd after deciding to renovate her house in London and sell it.

She says her contact at the firm, Michael Turner, told her he had served notice to the tenants in February 2020 – then Covid hit while she was out of the country for two years.

She became suspicious when her phone calls went unanswered. “I checked with the court and was told they had had to produce the papers 15 days before the review in April 2021 but had failed to do this, so were given another review date but failed to produce the papers a second time,” she tells LandlordZONE.

Back in the UK, she approached the estate agent that had recommended Tenant Eviction 21 and had provided the receipt for her payment – Marble Agency in Seven Sisters Road – now Theodore & Charles Ltd.

She was told Turner was ill, has been unable to contact him, and now despairs of getting her money back.

While regulated eviction firms have a solicitor acting for them, unregulated firms can only give guidance to clients, but their status is not always clear.

LandlordZONE was unable to contact Tenant Eviction 21 but Turner told us: “It’s not my company and I only did some consultancy work for them – I haven’t worked with them for several years.”

More information

The landlord believes there should be more information available for landlords to help them make decisions. “There’s not enough regulation around eviction companies,” she says. “Most of my savings have gone on solicitors and it’s affected my health. I hope my experience will at least stop this happening to other people.”

Theodore & Charles director Charlie Kleanthous tells LandlordZONE that it passed on the landlord’s money to Tenant Eviction 21.

He adds: “We’ve worked on successful cases with Mike Turner but in this case, communication was poor and that company didn’t fulfil what they set out to do.

“We wouldn’t recommend them again. The landlord should have been given an explanation – it’s possible that court papers were sent to the property where her tenant lives and were intercepted.”

Read LandlordZONE’s spotlight on the problem of unlicensed eviction companies.

View Full Article: INVESTIGATION: Exasperated landlord warns others not to use unlicensed evictions firms

Portfolio landlord bags mother of all remortgages – £11m for 63 properties

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Shawbrook Bank has just arranged the mother of all buy-to-let mortgages for a portfolio landlord needing £11 million to refinance a spending spree in the North West.

The landlord wanted to release capital from 63 houses and flats and approached Empire Finance following the recent base rate rises and limited lending appetite from their previous high street lender.

Shawbrook agreed to an £8.5 million five-year fixed interest-only mortgage geared across the properties with an LTV of 75% and a £15 million lending facility – arranged with a standard personal guarantee of 25% and no debenture requirement.

Rate rises

The deal frees up equity and means the landlord can buy further properties down the line while protecting them from future rate rises over the next five years.

There are significant opportunities for ambitious property investors, says Matthew Taylor, national relationship manager at Shawbrook Bank, who adds that the case demonstrates its ability to deal with complex cases, the strength of the team’s relationship with Empire Finance and its appetite to lend.

“It’s important that brokers are able to build relationships with our team and feel able to speak directly to the decision makers on their case. Being able to do so gave both the broker and the landlord confidence in our ability to get this deal across the table,” says Taylor.

Gareth Broome at Empire Finance adds: “Our client’s needs were complex and it was important that we found the appropriate lending partner that would be able to accommodate and flex its offering.

“Shawbrook delivered on their promise and together we were delighted to complete this facility which has provided our client with sufficient capital to purchase £10m of additional properties.”

Read more: Mortgage FAQs for landlords answered.

View Full Article: Portfolio landlord bags mother of all remortgages – £11m for 63 properties

Warning of a ‘Tsunami of students’ struggling to find accommodation

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UK rental guarantor service Housing Hand has warned that A level results day is likely to trigger a tsunami of students struggling to find accommodation for their university places.

The warning comes in light of unparalleled demand for university accommodation

View Full Article: Warning of a ‘Tsunami of students’ struggling to find accommodation

Letting agent who stole £80,000 from dozens of landlords admits fraud

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A rogue letting agent who did a runner, leaving landlords more than £80,000 out of pocket, has admitted two counts of fraud.

Scores of tenants and landlords discovered Frank Smart (main pictured), the owner of Smart Residential Letting Agents in Newmarket, had kept their rent and deposits after the firm closed in July 2018, and they were unable to contact him, Ipswich Crown Court heard.

So numerous were his victims that a Facebook page has been set up where landlords who have lost money via his Smart’s activities can co-ordinate attempts to recoup their cash.

One landlord, Teresa Wright, revealed that “my rents are my pension [and] I had to find my tenants’ deposits because he also stole those.

“Some tenants had the stress of threatened eviction because their landlords thought they were not paying their rent. This man caused more than just financial loss and will probably get at worst a short custodial sentence in a soft prison and that will be halved”.

Witnesses

Local and national trading standards officers spoke to more than 30 witnesses during the investigation and found that numerous landlords hadn’t received rental income. They were forced to refund tenancy deposits out of their own pocket, resulting in individual losses ranging from £700 to over £8,000.

A spokesman for Suffolk Trading Standards says many of these landlords entrusted Smart Residential with their rental properties, and to hold tenancy deposits on their behalf.

He adds: “By law, these deposits should have been placed into a deposit protection scheme – offering protection to tenants in the event of a landlord or letting agency facing financial difficulties. We believe that Mr Smart failed to use this scheme, resulting in substantial losses for his victims.”

Fraudulent

Councillor Andrew Reid (pictured), Suffolk County Council’s cabinet member for public health and public protection, believes the prosecution sends a very clear message to business owners like Smart.

“Fraudulent trading will not be tolerated in Suffolk,” he says. “His actions led to countless landlords being significantly out of pocket, causing immeasurable personal and financial stress – and highlighting the importance of ensuring that any rental deposit is placed into a deposit protection scheme.”

Smart, of Dowding Avenue, Cambridge, will be sentenced at a later date.

View Full Article: Letting agent who stole £80,000 from dozens of landlords admits fraud