Welsh Landlords – Set Up to Fail?

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Are private landlords in Wales being set up to fail with the new legislation?

The recently implemented Renting Homes (Wales) Act has automatically replaced all existing ASTs with a new “Occupation Contract” from 1 December 2022.

All landlords are now required to issue “Written Statements”

View Full Article: Welsh Landlords – Set Up to Fail?

Merry Xmas and a Happy New Year to all our readers

admin    Uncategorized     agents

2022 has been a rollercoaster ride for landlords and property managers across the private renter sector, and we’d like to wish all of our 1.5 million readers, 50,000 newsletters subscribers and regular LandlordZONE Forum users a very Merry Xmas and a Happy New Year and, Government policy withstanding, a fruitful 2023.

The Landlord team.

View Full Article: Merry Xmas and a Happy New Year to all our readers

Home sellers cut prices to find a sale

admin    Uncategorized     agents

A major house price index says that the UK’s house price inflation is continuing to slow down – leading to property asking prices being slashed.

According to Zoopla, house prices in November rose by 7.2% over 2022 but the slowdown in prices is ‘gaining momentum’.

View Full Article: Home sellers cut prices to find a sale

LATEST:Government to give social tenants right to buy their rented homes

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Tenants in social and affordable housing now have the chance to apply for the government’s Right to Shared Ownership scheme.

The Department for Levelling Up Housing and Communities has published new guidance about the scheme which lets tenants buy a share of their property worth between 10% and 75%, giving them more control and autonomy.

Tenants will be eligible if they have been in social housing for three years, their property was built under the Affordable Homes Programme 2021-26, and they have lived in it for a year.

Shared owners can gradually increase the equity stake in their home, with the option to eventually buy a 100% share, allowing them to reduce the financial impact by accessing a lower mortgage and deposit.

Landlord

Eligible tenants can apply for the Right to Shared Ownership by completing the new application form and returning it to their landlord, who will carry out a series of eligibility checks.

Housing Minister Lucy Frazer (pictured) says: “All hard-working families and young people deserve the chance to live in a home of their own. We are helping tenants to do just that by supporting them with small, manageable steps onto the housing ladder, through the Right to Shared Ownership.”

She adds: “Buying a home is one of the biggest financial decisions people take and this is just one of the ways we are helping more first-time buyers reach their goal.”

The government’s wider Shared Ownership programme has seen thousands of people take their first step on to the housing ladder, with an estimated 136,600 new shared ownership homes built since 2010.

View Full Article: LATEST:Government to give social tenants right to buy their rented homes

LATEST: Manchester kicks off £1.5 million crackdown on bad landlords

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Greater Manchester has set its sights on catching more rogue landlords by implementing its Good Landlord Scheme to train enforcement officers and launch more licensing schemes.

Using £1.5m from the Housing Investment Loans Fund, it has created 10 new trainee roles across the city-region to expand housing enforcement – part of a three-year package of measures that also includes on-the-job training for existing officers.

The scheme, which was announced in April, will also provide funding for local authorities to introduce selective licensing and develop new information and guidance for tenants and landlords.

Trainees will work to support tenants struggling with damp, cold, insecure, or structurally unsound homes, gathering evidence and taking legal action against the worst offending landlords.

It has now started the recruitment process and explains that no previous experience is required.

Decent standard

Mayor of Greater Manchester, Andy Burnham (main picture), says hundreds of thousands of people living in the private rented sector in Greater Manchester rely on their landlords to uphold a decent standard and look after their homes.

“When those things are done properly, tenants can get on with their lives – but when they’re not, it can take a huge toll on their physical and mental wellbeing,” he adds. “In the very worst cases, it can pose a serious threat to their safety.

“That’s when housing enforcement officers have a vital role to play in supporting tenants and taking enforcement action against unscrupulous landlords.

“The Good Landlord Scheme is one way that we’re responding to this growing issue, by boosting the capacity of our local councils to carry out inspections and intervene.”

The authority also plans to bring forward a Good Landlord Charter next year, to help drive up standards in the sector and deliver on its ambitions for greater control over housing.

View Full Article: LATEST: Manchester kicks off £1.5 million crackdown on bad landlords

Tenant rental dilemma?

admin    Uncategorized     agents

An Agent has forwarded an application to me for consideration:

A 21-year-old to rent a flat. In a job since July so financially on paper can afford the flat. Woking for 4 years before that apparently. Can pay own deposit and RIA.

View Full Article: Tenant rental dilemma?

Hydrogen Ready Stopgap?

admin    Uncategorized     agents

Hi everyone, I am looking to replace a central heating boiler in a property with a new one and considering the new future-proofed options may be viable.

I note that most central heating manufacturers are now supplying hydrogen-ready boilers to the market.

View Full Article: Hydrogen Ready Stopgap?

Judge slams ‘arrogant’ landlord after illegal eviction of tenant during Covid

admin    Uncategorized     agents

An NHS doctor has been ordered to pay nearly £9,000 for illegally evicting her tenant at the height of the pandemic after he challenged a rent increase.

Wolverhampton Crown Court heard that Amy Eskander rented a bedroom out in her two-bedroom flat on Station Road (pictured) in Kenilworth between February 2019 and September 2020 and kept the other locked.

She tried to argue that she shared this flat as her principal or only home, which would not have afforded him legal protection from eviction.

But Eskander had signed an assured shorthold tenancy at a property in London and provided evidence in official documents that this was her home.

Text message

When the tenant said he was unable to afford a rent increase in June 2020, Eskander sent him a text message telling him to leave by 12th August.

He continued to pay rent but on 18th September he received a text saying she had changed the locks and removed his possessions.

The court heard that Warwick District Council had previously advised her to serve a legal notice, but instead Recorder Brand KC told Eskander she had “displayed an arrogance which was unattractive”.

He added: “In his last few weeks he had no heating or hot water, and while you did not cause this you did little to help it.”

Advance rent

The landlord had also kept the tenant’s deposit and advance rent and insisted that the case be held at crown court, where the Recorder said the tenant’s credibility had been challenged.

“During that trial you repeatedly lied and made false accusations that (the tenant) had been threatening towards you. I have seen little or no sign of genuine remorse from you.”

Eskander was fined £2,000, ordered to pay £3,600 compensation to the tenant and pay costs of £3,000 to Warwick District Council plus a victim surcharge of £190.

She got off relatively lightly – previous landlords found to have evicted tenants without following due process have been given a suspended jail sentence as well as fines.

View Full Article: Judge slams ‘arrogant’ landlord after illegal eviction of tenant during Covid

Landlords join push to halt Government ‘squeeze’ on private rented sector

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Nearly 80 landlords have signed an open letter to housing secretary Michael Gove warning that his Government’s policy in the rental sector is stoking housing inflation.

The landlords include Ben Beadle, chief executive of the NRLA as well as Guy Piggott, chairman of the Humber Landlords Association, as well as some 250 other business leaders and figures from the world of property including leading letting agents.

Four of these delivered a copy of the letter to Gove yesterday at the Department of Levelling Up, Housing and Communities in London, namely (LtoR) Kristjan Byfield, Co-Founder of The Depositary, William Reeve, CEO of Goodlord, Marco Sun, Director of Marc & Partners and Elise Monkhouse, Operations Team Lead at Reposit.

Exasperation

They are hoping the letter, which was launched last week, will alert Gove to the growing exasperation among agents, landlords and tenants over Government policy within the rental sector, which is curtailing supply, pushing up rents and making finding a property to rent nightmarish in many urban areas.

Signatories say Ministers must address the “unsustainable pressures on the private rented sector”.

The letter goes on to say: “As set out in the recent Renters’ Reform Bill White Paper, current policy objectives include improving the quality of housing and giving tenants greater peace of mind about being evicted.

“These are worthy objectives which we, and most tenants, support. But tenants – whether professionals or students – also want their housing to be affordable, and current policy appears to ignore this point.”

See all the signatories and read the letter. 

View Full Article: Landlords join push to halt Government ‘squeeze’ on private rented sector

Commercial landlords are “left in the lurch” as more business tenants go bust

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The worst fears of a commercial landlord are realised when the flow on quarterly or monthly rent payments starts to dry up! Read on to find out what to do if you’re faced with this.

According to the latest available Office of National Statistics (ONS) figures, the number of company insolvencies in England and Wales reached a 13-year high in the first half of this year and there’s been no sign of the trend abating since.

Total company insolvencies (5,629) in England and Wales in the second quarter of 2022 reached their highest quarterly level since Quarter 3 2009, driven by companies going in to voluntary liquidation.

Covid support gone

Government support during Covid meant that insolvencies had decreased in 2020, when average quarterly insolvencies in the early part of 2020 were slightly down on the 2015 to 2019 average, but in August 2022 more than 10 per cent of UK businesses reported a moderate-to-severe risk of insolvency.

Most reported energy prices as their main concern. Soaring energy costs and materials prices, consumers tightening their belts and lost orders are leading on a slippery slope into a recession, forcing a record number of firms out of business.

Construction, manufacturing, accommodation and food services, wholesale and retail trade industries together accounted for over half the total business insolvencies in the first half of 2022, and the rate that companies are going bust is nearly 50 per cent higher than the average over the four years before the pandemic.

Small firms with less than 50 staff are the most likely to face insolvency according to the ONS, with a moderate-to-severe risk of insolvency in that sector. A weakening economic outlook and the prospect of increasing energy costs as government support is lifted going into 2023 is weighing on companies’ futures.

Most of the businesses in the above sectors were heavily affected during the pandemic. A combination of cash flow issues, the removal of government Covid support, plus the surge in energy prices following the Ukraine war, have accelerated falling business confidence.

With more hardship in the pipeline as consumers tighten their belts, there’s likely to be something of a cliff edge following the Christmas spending spree, as economic experts predict it is likely to get worse before it gets better.

What can landlords do when faced with tenants going bust?

Usually the first sign of trouble is missed rent payments, tenants asking for more time to pay, the bank rejecting cheques or cancelling standing order payments.

In these situations tenants are usually inventive in the excuses they come up with but landlords need to be on their guard and need to get to the bottom of what’s happening quickly.

Being aware of the importance of monitoring rent payments means that you can at an early stage try to develop a communications channel with your tenant to establish the true position.

Whilst doing this, a visit to the premises should give you the opportunity to observe what’s happening: is there to usual level of activity in the firm?, whether that’s reduced footfall in a retail business or piling up inventory and finished goods in a manufacturing business, when orders are being cancelled or delayed, the signs will be there if you’re observant.

Other obvious signs to look out for are those shouting out to you, about stock clearances, massive reductions and perhaps even closing down sales, all literally giveaway signs that trouble is looming. If this is unusual activity for the business concerned then the signs are definitely on the wall and in a hostile economic environment like this its important that you quickly get to the bottom of what’s happening with your tenant.

Search the bankruptcy and insolvency register

Don’t panic

It’s important not to panic and make matters worse. Threats will only close the communication channel between you and your tenant so you should approach the issue in a spirit of support, cooperation and professionalism.

If your tenant is open and honest about its situation then perhaps there’s something you can work out together. Losing a tenant can often mean a long void period where the landlord becomes liable for payments, plus you have the cost and expense of marketing the property and signing up a new lease.

Vacant commercial premises costs can be considerable, turning an income producing asset into a liability. After 3 months vacant (unless a listed building or a low rateable value) the landlord becomes liable for the full cost of business rates, insurance at vacancy rates (often double the rate when occupied), repairs costs fall back on the landlord (if this was a full insuring and repairing lease), there’s likely to be a cost for increasing security and utilities standing charges will by payable.

Even if rent payments are considerably reduced or fail altogether it is often better to sit tight and let the tenant take the responsibility for all these costs, as long as they are on a lease commitment. It may be that the business can survive on that basis and normal serve can resume eventually.

When all else fails

If the tenant does go bust you need to quickly establish what kind of insolvency process the tenant is going down: voluntary liquidation, administration, compulsory liquidation, receivership or a voluntary arrangement.

This is likely to be a very difficult time for your tenants as well as yourself, so try to approach the issue with professionalism and sensitivity. You are likely to be the one in the better financial position after all, so you can afford to be sympathetic, but you still need to protect your own interests.

Try to find out quickly who is dealing with the matter; is it an administrator, a liquidator, a receiver, or is it your tenants themselves who are making arrangements? Making contact is important with whoever it is is important and cooperation on both sides can only help.

You rent payments

In the case of administration you need to speak with the administrators as soon as possible as you may be asked to cancel the rent payments altogether or reduce them in an attempt to allow the business can continue trading, or facilitate a sale as a going concern, or a winding up.

But in all the other circumstances, you are still in your rights to demand rent to be paid as long as the lease remains current and the business is still using your premises. That doesn’t mean you will get paid if the tenant is already in arrears – very likely.

Unfortunately, if the company is already in receivership, any secured creditors such as banks and finance companies will take priority with payouts from remaining assets. Landlords are unsecured creditors so you will join the pool of all the other creditors such as supplies to to what’s left, if anything.

The administrator’s or liquidator’s fees come second in line for payouts, including their expenses the the preferred creditors will come next including employees of the company, and since 1st December 2020, HMRC is also ranked as secondary preferential creditors.

Regaining possession

In view of what’s been said above, and unless you have another tenant lined up, or you know the property will re-let easily, you should be in no rush to retake possession. When you do you take on the responsibility of all the vacant costs.

You know, or you should do by now, that you will eventually regain possession without further action on your part, so going down the road of forfeiture proceedings will be unlikely to be necessary. There may be a chance the administrator can sell the business as a going concern, in which case a new tenant will take over the existing lease.

In the absence of this happy scenario, you can look to start marketing the premises at the earliest opportunity to try to minimise your losses.

View Full Article: Commercial landlords are “left in the lurch” as more business tenants go bust