Modest drop in rental costs heralds busy start to the year

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The average cost of rent fell slightly during December, dropping 1.47% to £1,071, according to the latest Rental Index from Goodlord.

The South West saw the largest reduction of 2.68% to £1,066 while the only region to see an increase was the North East, where prices moved up 1.36% to £800. Average rental costs are now at their lowest since June 2022, however, the year ended with rents up by 8.7% across England compared with 2021. 

Highest prices

The highest rental prices were found in Greater London (£1,796) and the lowest in the North East (£810), the same regional split as Goodlord recorded in 2021.

It reports that the average void period remained unchanged at 20 days during last month as tenant demand continues to come up against lack of stock. The most significant shift was seen in the South West, with a 8.7% decrease, followed by the East Midlands, which experienced a drop of 8%. Greater London had the highest percentage increase in voids up from 12 days to 13 days – a jump of 8.3%. This was followed by the South East, which saw a 5.6% rise in voids, and the West Midlands, with a 4.8% increase. 

Incomes rise

Meanwhile, tenants’ average income fell 2.4% to £30,346 in December, although there was an average 11.1% increase across all regions during 2022. With rental costs rising by 8.7% during the same period, the average increase in tenant incomes outstripped the pace of rent rises.  

Goodlord COO Tom Mundy says: “We always expect to see a dip in activity and a drop in rental averages during November and December, so the steadiness of voids and the very marginal shift in rental costs this month mean we’re likely to see a very brisk pace across the lettings market in the early months of 2023.”

View Full Article: Modest drop in rental costs heralds busy start to the year

Ban for letting agent who claimed £100K in Bounce Back loans

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A letting agency boss has been hit with an 11-year ban after repeatedly abusing the Bounce Back Loan scheme.

Laszlo Szabo, the sole director of Letting Base Ltd in London’s Holloway Road, applied for – and was granted – a Bounce Back Loan of £38,000 to support his business, which had formerly traded as Hungarian Lettings Ltd. Five days later he applied for another Bounce Back Loan of £50,000, this time from a different bank. Ten days after this he applied for a £12,000 top-up to the first loan, taking the total borrowed up to £100,000.

Rejected application

The following day he returned to the second bank, seeking a further top-up of £50,000 to the second loan. This time the application was rejected. Under the rules of the government scheme, which aimed to keep companies afloat during the pandemic, a business could only take out one loan, although they could apply for a top-up if the original loan was less than the maximum to which they were entitled.

Letting Base Ltd went into liquidation in January 2022 owing more than £243,000, triggering an investigation by the Insolvency Service. Szabo’s disqualification prevents him from directly or indirectly becoming involved in the promotion, formation or management of a company, without the permission of the court.

Blatant abuse

However, due to Szabo’s personal circumstances, it is unlikely that repayment of the Bounce Back Loans will be made, says Nina Cassar, deputy head of investigations at the Insolvency Service. She adds: “His blatant and repeated abuse of taxpayer’s money has resulted in a lengthy disqualification, which will serve to safeguard the economy from traders who exploit financial support packages designed to help UK businesses.”

View Full Article: Ban for letting agent who claimed £100K in Bounce Back loans

Demand for London’s rental homes is ‘unseasonably high’

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Tenant demand for homes to rent in London is ‘unseasonably high’ but rent rises are beginning to slow down, one agent reveals.

According to Chestertons, they saw the first signs of the capital’s rental market cooling down in October –

View Full Article: Demand for London’s rental homes is ‘unseasonably high’

Replacement guarantor?

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Hello, We rent a house to a young family who have been tenants for 2 years. At the time we asked for a guarantor, which they were happy to provide by way of a family member.

The tenants are now saying that they have had a fallout with the guarantor and would like them removed from the agreement.

View Full Article: Replacement guarantor?

TENANT BLOG: What I think of the Government’s looming renting reforms

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If you haven’t heard of it before, the Renters’ Reform Bill is set to be voted on before May 2023, bringing with it a plethora of proposed changes for landlords and tenants alike.

Shelter, who along with other organisations are campaigning for a fairer deal for tenants, believes that they deserve greater long-term security. Among this list of changes is:

• The abolishment of the Section 21 Notice.
• The formation of a property ombudsman.
• A ‘decent homes’ standard.
• Mandatory registration for Landlords.
• Double the required notice period for rental increases.

My question is…

Why wouldn’t a tenant who follows the rules and pays rent on time feel secure in their own home? Surely landlords aren’t booting out suitable tenants for no good reason?

What about those that are consistently late with rental payments? Those that breach their tenancy agreements?

It’s pretty time consuming and expensive enough to take non-paying tenants to court as it is.

To me, it feels like the last thing the PRS needs is more red tape that affords terrible tenants flexibility that they don’t entirely deserve.

Everybody deserves security in their own home, don’t get me wrong. But what about landlords?

Who’s looking out for their income and livelihood that is ultimately affected by the minority of tenants who just don’t want to play fair?

Thrashing

Over the last few years, landlords have taken a thrashing. Heavy legislative changes have been introduced and it’s getting to the point where a lot of smaller landlords are selling up because:

1. They don’t have the time nor energy to keep up with the consistent turning tide.
2. The passion they once had for property has dwindled.
3. It’s got to a point where their investment is no longer a sensible one.

To me, it’s odd. As a tenant myself and someone who works in the property industry, most landlords I talk to operate by the book.

I find it odd that various third parties like to paint a picture of monstrous, margherita-sipping, beach-dwelling landlords when it couldn’t be further from the truth.

Being a landlord isn’t always passive income for little to no work. If you take property seriously (a very large portion do) then you’ll find that renting out a property can be strenuous at best.

Many landlords I have spoken to have had sleepless nights from non-paying tenants and some have even experienced total devastation at the hands of reckless tenants, with their properties being trashed with little to no support from local authorities or the government.

If you’re reading this and are already at wits end. Hang in there.

Landlords have a fantastic network of support such as work that’s being carried about by organisations like LandlordZONE, who we’re proud to be exclusively partnered with because of the fantastic stuff the team do.

You can also connect with me on LinkedIn here or follow Alphaletz by subscribing to our newsletter in just a couple of clicks.

Part and parcel of what I do in the property industry is I aim to make the lives of landlords easier, not just with introducing technology to their day to day processes, but by giving out content that might help with tenant referencing, inventories and inspections.

Author bio

Connor (main picture, inset) is an experienced marketing executive within the property industry, working predominantly with property management software. He currently works with Alphaletz and interacts with plenty of landlords, helping them make life easier with the assistance of technology. All views here are his own.

View Full Article: TENANT BLOG: What I think of the Government’s looming renting reforms

BREAKING: Landlords cry foul over council’s HMO planning rules change of mind

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Long-term HMO landlords in Portsmouth risk losing their C3/C4 status with no chance of getting it back due to confusion over planning rules, it is claimed.

Many took advantage of the option to switch between family use (C3) and HMO (C4) without needing planning permission in 2012 and 2013.

But Portsmouth & District Private Landlords Association (PDPLA) says it wasn’t warned that this flexibility had an expiry date.

The authority’s planning team has told surprised landlords that the lawful use is fixed on whatever exists 10 years after they obtained dual use.

Those landlords who may have started letting to a family due to a shortage of students during Covid and now want to revert to an HMO will have to reapply but might not get planning permission if their property is in a relatively dense area of student HMOs. 

Ten-year term

PDPLA chairman Martin Silman (pictured) will ask the council for a policy agreement that if a property with existing C3/C4 permitted use applies for it again it should be granted – regardless of the current use.

“Without this assurance, our advice is to leave C4 properties empty or to make sure that C3/C4 properties retain their C4 status by ensuring they are let as HMOs at the end of the 10-year term,” he tells LandlordZONE.

“We believe quite a few landlords will be affected – we know of one agent who put through about 200 properties on this basis.”

Disaster

Portsmouth landlord Daryn Brewer (pictured), from the HMO Council Tax reform group, says it’s a disaster starting to happen. “We’ve got a national housing crisis yet we’re making it harder for people to renew their HMO planning application,” he tells LandlordZONE.

“Plus, the HMO register isn’t getting updated quickly enough so landlords may get turned down because the council thinks there are enough HMOs in a street when in fact they’ve been sold and turned into family homes.”

View Full Article: BREAKING: Landlords cry foul over council’s HMO planning rules change of mind

Can Property Investment Companies Claim The 19% Corporation Tax Small Profits Threshold?

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In our view, the answer is YES, property investment companies can claim the 19% Corporation Tax ‘Small Profits Threshold’.

This is a matter which has recently sparked significant debate among Chartered Accountants and Chartered Tax Advisers.

Our view is explained by Property118 Tax Consultant Alex Norian ACCA

View Full Article: Can Property Investment Companies Claim The 19% Corporation Tax Small Profits Threshold?

Legal & General reveals £5 billion investment in housing last year, including BTR.

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Legal & General Capital helped fund more than 17,000 new homes across affordable housing, suburban build-to-rent (BTR), modular housing, traditional build-to-sell, and key worker homes last year.

The insurance group invested £5 billion towards levelling up the UK’s towns and cities in a bid to drive regional economic growth and tackle the housing crisis.

Many schemes involved joint venture models such as a 3,000-home partnership with Lovell and a 2,500-home partnership with Metropolitan Thames Valley Homes.

CEO Laura Mason (main image) says L&G is on track to achieve its ambition of generating up to £600m in profit from alternative assets by 2025 and that its strategic partnerships have been with like-minded investors, who want stable, long-term returns, but are also looking to drive positive social impact and limit the impacts of climate change.

“With an increasingly uncertain picture over the next 12 months, it’s essential that financial institutions continue to invest in the real economy, recycling pensions funds and savings into projects that help to create jobs, housing and vital infrastructure,” adds Mason.

“Despite headwinds, our appetite to continue to invest globally, alongside other institutional partners, remains strong for 2023.”

10,000 houses

Last year, the group vowed to build 10,000 houses a year along with 5,200 build-to-rent homes to tackle the UK’s housing shortage. Its ambitious target will be made up of more than 3,000 traditional build-to-sell homes, up to 3,000 affordable and modular homes and 1,000 suburban rental homes.

It has 17 BTR schemes planned or in operation, delivering 5,000 homes and will also build 5,100 later living homes in a joint venture with NatWest Group Pension Fund.

View Full Article: Legal & General reveals £5 billion investment in housing last year, including BTR.

Majority of landlords will have to raise rents next year ‘by at least 10%’

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Almost two-thirds of landlords (62%) will be forced to raise rents by at least 10% in the next 12 months if market conditions don’t improve.

Research by Aldermore Bank found that despite this, landlords feel conflicted about passing on costs in an already difficult climate, with 64% worried their tenants might not be able to pay their rent because of the rising cost of living.

With record levels of inflation, growing costs and housing market volatility, nearly half (48%) have been unable to expand their property portfolio while 42% might even consider downsizing in 2023.

In a bid to maximise returns, the same number report that if they were to look at expanding their portfolio, they would purchase as a limited company.

Although nearly half (49%) feel it’s harder being a landlord now compared to this time last year, Aldermore’s survey reveals that 54% still feel optimistic about the future, with 66% believing that being a landlord remains a good way to make money.

Energy efficiency

In a bid to make their portfolios more sustainable and meet potential EPC regulation changes, nearly six out of 10 landlords (58%) say that the sustainability and energy efficiency of their property portfolio is a priority; 53% plan to carry out property improvements to address this in the next 12 months.

Jon Cooper (pictured), head of mortgages at Aldermore, believes despite significant challenges during the last year, there are healthy and positive opportunities for UK landlords.

He adds: “As we venture into 2023, landlords should work closely with their brokers to assess their portfolios and identify opportunities that lie ahead.”

View Full Article: Majority of landlords will have to raise rents next year ‘by at least 10%’

Paragon unveils 5-year fixes and re-prices SVR

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Paragon Bank has announced the launch of four 5-year fixed rate buy-to-let mortgages, featuring reduced rates and fees, alongside the re-pricing of its Standard Variable Rate (SVR).

The specialist lender is replacing four of its 5-year fixed rate mortgages with new products that feature lower rates and fees and are offered with £350 cashback.

View Full Article: Paragon unveils 5-year fixes and re-prices SVR