Campaigners claim latest mould data proves too many PRS homes ‘substandard’

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The Government has released official statistics that shows that one in nine or 11% of privately rented homes in England have a damp problem.

This latest tranche of data from the English Housing Survey also reveals that a quarter of PRS properties fail decency standards and that 14% are unsafe.

Campaigners have jumped on the figures as proof that a legal minimum quality standard for privately rented properties need to be introduced, as expected to be included within the looming Renters Reform Act next year.

“Homes are critical to our health and wellbeing. Damp and unsafe homes are making too many private renters ill,” says Alicia Kennedy, Director of Generation Rent (pictured).

“This winter more of us are struggling to afford to keep our homes warm, putting us at greater risk of ill-health.

“We urgently need the Renters Reform Bill to raise minimum standards that renters can expect from their homes, and give them the security of tenure they need to complain without fear of eviction.

“And if the government is serious about eradicating the scourge of damp and mould, ministers must give tenants better legal support to take action against negligent landlords.”

Huge fine

This latest data from the Official of National Statistics coincided with news form Cardiff that magistrates have fined a local landlady £10,000 with £2,000 in costs for a catalogue of failures relating to a house she owns and rents out as a House of Multiple Occupation (HMO.)

Rowshanara Begum’s HMO in Blaenclydach Street in Grangetown was found to have a catalogue of faults were identified,

This included inadequate structural fire protection to escape from the property, no fire alarm system, unprotected electricity meters, defective fire doors, broken windows, unsafe electrical installations, dirty carpets, unsafe kitchen facilities and evidence of penetrating damp (main picture).

Cllr Lynda Thorne (pictured), Cabinet Member for Housing and Communities said: “HMO’s play an important role in the city’s housing stock.

“As a landlord, the financial yield from these properties is often higher than renting a family home, but renting HMO’s carries additional responsibilities and the required investment in the property to ensure that it is safe for the tenants that are living there.”

View Full Article: Campaigners claim latest mould data proves too many PRS homes ‘substandard’

Government energy discount – Do tenants or the Landlord get this?

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Hello, this is the scenario:

Landlord owns and rents a property to students.

Landlord is the registered payer for energy bills (gas & electric).

Landlord receives Government ‘handout’ for household energy bills but payment is facilitated and paid out via the electric bill as a discount.

The post Government energy discount – Do tenants or the Landlord get this? appeared first on Property118.

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Spray foam insulation can result in refused mortgage applications

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In September the Government announced a £2bn plan to offer home insulation grants of up to £5,000 per household in England. This is to be known as the Green Homes Grant and has replaced previous schemes such as the Green Deal which largely failed in their key objectives.

Grants can pay at least two thirds of the cost of some energy-saving solutions. The maximum amount available is £5,000, or £10,000 for those on certain benefits.

The new scheme will come as a welcome boost to the home insulation and renovation industry, while at the same time as offering to improve the energy efficiency of homes using approved installers.

Poor quality installations

Previous government schemes have been plagued with poor quality installations which lead to low insulation efficiency and in some cases contribute to other problems such as condensation and decay.

One type of insulation treatment in particular is problematic: spray applied foam insulation. The reason is that most surveyors take a jaundiced view of this material and its application in homes and most mortgage companies don’t like it. It means that in some cases loans will be refused when a property has had foam insulation installed.

Quick and easy solution?

Whilst spray foam is quick and easy to apply – either in a loft space between rafters, or within internal walls inside studied partitions or timber frames – it takes a skilled operator to apply it properly to avoid problems [see picture above] in the future.

Once applied, good or bad, it’s difficult or impossible to see if it’s hiding moisture condensation and wood decay. Therefore, when surveyors value houses for mortgages they will flag this up to the mortgage lender as an issue and loans get refused.

Like many services in the building trade there are rogue and unscrupulous operators who will apply this type of insulation with little or no regard to the quality of the finished product, and as it’s impossible to inspect what’s going on behind the foam, many surveyors will simply condemn it.

Foam removal

Once installed it’s very difficult to remove the foam. It’s got to the stage, with spray foam insulation, that companies are now offering their services to remove it when people find they can’t get a mortgage – most likely the service is offered by the same companies that apply it.

Correct application

The application process, when done correctly, solves a lot of problems. It’s quick to apply and the chemicals come in two large tubs instead of a truck load of Celotex sheets, which are then very time consuming to install, involving a lot of cutting to size and fitting.

Installing slab or Celotex type insulation needs a lot of care to get the sheets to the correct size, a snug fit to avoid any gaps, where cold bridging could occur. All joints and any gaps should be filled with sealer and all then sealed over with foil tape. A careless workperson can make the difference between a perfectly insulated roof or wall and a far less effectively insulated one with potentially hidden problems.

What is spray foam insulation?

Sprayed foam insulation is not a new idea, its been around for at least 30 years. There are two types: closed cell and open cell. The closed cell acts as a vapour barrier but it must be installed without any gaps where it touches the wood sides. The open cell type allows moisture to seep through but can only be used if there’s a breathable vapour barrier on the other side, usually the felt type roof covering.

So the open-cell products are vapour permeable and must only be used in conjunction with a breathable roof covering, a breathable roofing felt. Closed-cell products are often used to stabilise defective roofs with no felt layers, sprayed directly to the underside of slates or tiles which gives them some stability if their fixings have corroded. The problem here is, the foam covers a lot of sin hence why the mortgage companies don’t like it.

Closed cell products can undoubtedly extend the life of a defective roof, quickly and without going to the disruption and expense of replacing the roof covering. The closed-cell solution will improve airtightness in a home and depending on how a loft space is being used, this can be an efficient way of insulating the loft and house space, perhaps more so that deep loft insulation, which leaves the loft space cold. However, if the loft space is included in the sealed envelope of the house, to avoid condensation the loft must then have extra ventilation.

Spray foam performance

Truly reliable performance data on spray foam insulation installations is hard to find. The insulation qualities will vary according to the thickness of the application and whether all gaps are sealed. The main problem is that interstitial condensation can occur.

This means that condensation forms on the cold side of the insulation which leads to decay in the rafters, slate battens and slate / tile fixings. The quality of the application is therefore crucial if problems like these are to be avoided. This is not a DIY job, training and a good degree of skill are required by the operative to avoid these problems.

Depending on the situation, a sealed vapour barrier may be required on the warm side of the insulation as any gaps could allow air leakage and cause condensation on the underside of the roof covering. Therefore, spray foam insulation is not usually an option if breathability is required.

Any roof can be affected by condensation if it lacks the correct ventilation, and any type of insulation can cause this whether conventional or spray foam. It would be wrong to blame or condemn spray foam entirely on that basis, it’s simply a matter of the correct design and application.

Ventilation the key

Ventilation is the key to preventing condensation in any property, full stop. Structure and fixing decay, or wet and dry rot in timber, whether in roofs, floors and timber frames can all occur when there’s insufficient ventilation. Moisture will find its way into sealed spaces or spaces without a good air flow, which never properly dries out, and that’s when trouble occurs.

There does not appear to be much evidence of serious decay problems with spray foam insulation when applied correctly, and in the right circumstances, but to avoid problems with mortgage applications it may be wise to stick with conventional insulation types.

View Full Article: Spray foam insulation can result in refused mortgage applications

BoE base rate rise – property experts respond

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News that the Bank of England has pushed up the base interest rate by 50 basis points to a 14-year high of 3.5% has left many property experts wondering whether property buyers will get more help and whether another rise will be forthcoming.

The post BoE base rate rise – property experts respond appeared first on Property118.

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REACTION: BoE interest rate rises 0.5%, but will it drive up mortgage costs?

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The Bank of England has raised interest rates by 0.5%, taking the base rate to 3.5% and heralding a rise in many landlords’ buy-to-let mortgage repayments.

Following the latest meeting of its Monetary Policy Committee lead by Governor Andrew Bailey (pictured), members voted for the ninth consecutive rise since December 2021, putting the rate at its highest level for 14 years.

Landlords and homeowners now face the likelihood of more expensive monthly repayments; about 1.6 million people on tracker and variable rate deals will see an immediate increase in their monthly payments. Those on a typical tracker mortgage will pay about £49 more a month while those on standard variable rate mortgages face a £31 increase.

Those three-quarters of mortgage customers on a fixed-rate mortgage – including canny landlords who’ve been releasing maximum equity from their portfolios when rates were low before fixing – won’t see monthly payments changing immediately, but house buyers or anyone wanting to re-mortgage will have to pay a lot more now than if they had taken out the same mortgage a year ago.

The committee warns that more rate rises are on the cards to further bring down inflation, with analysts suggesting that they could reach 4.5% by the summer.

Financial expert: Adrian Anderson, Anderson Harris

“Although there is certainly no Christmas cheer from the Bank of England this year for borrowers, the fact that the size of the hike is down 0.25% on the previous increase, coupled with lower inflation figures released yesterday, means that we may be seeing the start of the end of the rate hike cycle with the market now pricing a terminal rate (top rate) for base at 4.5%, down from previous Armageddon predictions of 6-6.5% post mini-budget.”

The portal: Tim Bannister, Rightmove

“It’s important to remember that this rise was largely expected by the markets and so will already have been factored into many mortgage lenders’ fixed rates.

“So the good news is we don’t expect this rise in the base rate to translate directly into increases in current fixed mortgage interest rates.”

The conveyancer: Simon McCulloch, Smoove

“The Bank of England is walking on a very fine tightrope while trying to curb inflation. Today’s interest rate increase will put even more constraints on the financial situations of both buyers and sellers in the property market, especially those on tracker mortgages or coming to the end of their fixed-rate term soon.”

The agent: Lawrence Bowles, Savills

“On the assumption that interest rates peak then gradually ease back a predicted peak of 4% from the middle of 2024, Savills is forecasting that values will begin to recover and that the average UK house price will rise by a net figure of +6% in nominal terms over the next five years.

“This means that by the end of the forecast period (2027), the average UK house price is expected to be at £381,578, a £22,290 gain over five years. This will put prices a significant £92,000 above the pre-pandemic level, following two and a half years of considerable growth (+24% to the end of September).”

View Full Article: REACTION: BoE interest rate rises 0.5%, but will it drive up mortgage costs?

Bank of England mirror the Fed with 0.5% Base Rate rise

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The Bank of England’s Monetary Policy Committee (MPC) today voted by 6 – 3 members to mirror the Fed by increasing the Base Rate by 0.5% to a total 3.5% interest rate. Two MPC members voted to keep the Base Rate at 3% and one member voted to increase it by 0.75%.

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View Full Article: Bank of England mirror the Fed with 0.5% Base Rate rise

Landlord writes to Gove as bankruptcy looms over ‘arbitrary’ cladding rules

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A landlord who’s facing bankruptcy has written to Housing Secretary Michael Gove voicing his frustration that he is not eligible for any cladding funding despite only earning £63 a week from his properties.

The landlord, who has BTL interest-only mortgages, has two freehold semi-detached houses and three leasehold apartments, two of which are over 18 metres in height and need cladding remediation. However, because he owns more than three properties, he’s not covered by any Building Fund financial package.

“Over the last 11 years my real profits from all five BTL properties, after expenses, including insurance, management fees, new boilers, new roof and new windows amounts to an average profit of £276 per calendar month, or £63 per week,” he explains.

“My BTL mortgage payments have doubled since December last year and I am now in the red every month and making up the shortfalls from savings.”

He believes it’s unfair that someone with three £1 million apartments is covered and deemed a ‘victim’ of historic failings, yet he is on the cusp of bankruptcy.

Sink or swim

He tells Gove in a letter also sent to the Leasehold Knowledge Partnership: “Whether I sink, swim or just tread water is something I accept.

“My investments have not worked out and I have to deal with the consequences. But what I absolutely do not accept is being made liable for cladding works where an arbitrary cut off point has been made that bears no relation whatsoever to income reality.”

The landlord has had the same tenants in his freehold houses for the last 11 years but might have to sell them to subsidise the other three leasehold properties – and that’s without even considering the cladding costs. Those tenants will be evicted, he adds.

“Another consequence of punishing small scale landlords for the large-scale historic scandal created by government, its agencies and big business.”

View Full Article: Landlord writes to Gove as bankruptcy looms over ‘arbitrary’ cladding rules

Claiming deposit?

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Hello, a tenant has disappeared after a possession order was granted owing thousands in rent. I have requested the deposit at DPS to be paid to me.

I have no contact number or forwarding address for the tenant.

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Renters see biggest annual rent rise since 2016

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Tenants have seen rents rise yet again with the Office for National Statistics (ONS) reporting that rent prices grew by 4% in the year to November.

The latest Private Housing Rental Prices index highlights that rents were slightly higher in last month than October’s 3.8%.

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‘Dear Mr Gove, stop hammering the PRS’ say leading figures in open letter

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We, the undersigned, are business leaders within the Private Rented Sector across the UK. 

With inflation hitting levels not seen since October 1981, we believe that current government policy in the rental sector — covering 35% of UK homes — is stoking housing inflation, the largest single component of the cost of living. 

As set out in the recent Renters’ Reform Bill White Paper, current policy objectives include improving housing quality 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.

A recent survey of tenants confirms that rising levels of rent are tenants’ biggest single concern, cited by 86% of respondents.

By contrast, the condition of rented properties, a priority of the Renters’ Reform Bill, while also a significant concern, is cited by fewer than half as many tenants: 42%. 

Government policies to restrict landlords’ legal rights, raise minimum energy efficiency standards to an EPC band C, extend mandatory local licensing, raise taxes on property income and transactions, enhance compliance obligations for HMOs, and increase maintenance costs are putting undue pressure on landlords — most of whom have only one or two rental properties.

Already, we see net negative repercussions on rental supply, with many landlords leaving the sector; property portal data shows that supply is down 46% compared with the five-year average. 

At the same time, tenant demand is at an all-time high, with portal traffic up 142%. Many surviving landlords are understandably looking to cover their increased costs via higher rents.

Landlords who agree with this letter's points can sign the open letter here.

Goodlord’s Rental Index saw rents on new tenancies in September hit £1,249 PCM, up 13% on the same period in 2021. Rent increases restrict mobility and supply, with tenants frightened to move house for fear of facing even higher rents in a new home. 

By failing to encourage adequate supply, government policy is directly contributing to the sharp increases in rental prices. 

Freezing rents in response, as recently introduced in Scotland and proposed by London’s Mayor, would further damage the sector, restricting supply to a greater extent and fuelling landlords’ withdrawal from the sector.

We urge the government instead to consider ways to improve supply – while continuing its aspirations to ensure quality homes for tenants – by ensuring the rental sector remains an attractive place to invest without relying on skyrocketing — and ultimately inflationary — rents.

Signed (to date) by:

Ben Beadle, NRLA
Theresa Wallace, Savills
William Reeve, Goodlord
Peter Knight, Property Academy
Gary Wright, Flatfair
Heidi Shackell, The Lettings Hub
Ben Grech – Reposit
Chris Hutchinson – Canopy
Kristjan Byfield – The Depositary
Eric Walker –  Martin & Co

View Full Article: ‘Dear Mr Gove, stop hammering the PRS’ say leading figures in open letter