Labour promises ‘big review’ of private rented sector if it win election

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Shadow Housing Secretary Lisa Nandy has flagged up a big review of the private rental sector if Labour wins the next election.

Speaking at the party’s annual London conference over the weekend (pictured), she said the party had set out plans to tilt the balance of power back towards tenants through a powerful new Renters’ Charter and a new Decent Homes Standard.

The leader of Hammersmith and Fulham Council, Stephen Cowan (pictured), would lead the review into how any reforms would work, Nandy told delegates.

“Security in your home, the right to make your home your own and most of all the right to live in a home fit for human habitation is non-negotiable,” she added: “I’m delighted that Steve is going to drive forward this work so that we are ready to go on day one.”

Charter promise

Nandy has pledged to set up the charter within 100 days if Labour wins the next election, which is expected to include an end to automatic evictions for rent arrears and no-fault evictions, the right for renters to have pets, to make reasonable alterations to a property, and to introduce a four-month notice period for landlords.

She’s also laid into the government’s levelling up strategy, labelling it a “ludicrous Hunger Games-style contest where communities are pitted against one another, and ministers sit in Whitehall picking winners and losers”. Labour would scrap the policy, said Nandy.

“It takes an extraordinary arrogance to expect us to be grateful for a partial refund on the money they have stripped out of our communities, which has decimated vital local services like childcare, buses and social care.”

At a speech later this week, she’s expected to say that should Labour win, it would carry out its commitment to hand over powers to local communities in a wide range of policy areas, including housing.

View Full Article: Labour promises ‘big review’ of private rented sector if it win election

We are all facing the prospect of rising mortgage rates

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Just over a year ago, the Bank Base rate was 0.1%. Since then, there have been 9 consecutive increases with the rate now at 3.5%.

It is predicted that the rate will increase by a further 0.5% this coming Thursday

View Full Article: We are all facing the prospect of rising mortgage rates

Northern Rock excess mortgage interest claim?

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I have come across a Northern Rock excess mortgage interest claim being started by Harcus Parker. Although they have not yet had High Court permission to pursue the claim, if it proceeds they say it will be on a No Win No Fee basis.

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Buying tenanted property – can you ‘reset’ the tenancy to ensure it is valid?

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Hello, We are considering buying a block of 5 flats, all tenanted. Some have been on-boarded through an agent and others have not.

Our concern is that at least some are not valid tenancies in which prescribed information was not given or deposits protected in the correct way

View Full Article: Buying tenanted property – can you ‘reset’ the tenancy to ensure it is valid?

From Ltd back to my own name?

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Hello, I currently have one Buy to Let property which is in a limited company. I bought the property 5 years ago in an Ltd to get around the Section 23 legislation and so be able to claim mortgage interest as an expense.

View Full Article: From Ltd back to my own name?

Capital cost vs allowable expense?

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Hello, Would reinstatement (like for like) following an accident to a property be considered a capital cost or allowable expense vs income?

My instinct is to view it all as maintenance/repair because there was damage which needed attention to get it back to how it was prior to the accident.

View Full Article: Capital cost vs allowable expense?

Landlords to challenge Scottish rent control extension

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A coalition of landlords and letting agencies are to seek a legal challenge to the Scottish Government’s rent control and eviction ban legislation and its proposed extension from April. The Scottish Association of Landlords, Scottish Land and Estates, and Propertymark have together submitted a petition to the Scottish Court of Session requesting a judicial review.

Emergency legislation coming out of Covid was meant to last until the end of March this year, but the Green Party MSP and tenants’ rights minister Patrick Harvie has confirmed that he is planning to extend this for another six months. Landlords will have rent increases restricted to a three per cent maximum.

The Nicola Sturgeon’s Scottish Government has recently revealed these plans to extend the six-month eviction ban with rent controls. Landlords are furious about what was intended as a temporary measure, may, as some predicted, be a backdoor means of imposing permanent rent controls on Scottish landlords.

A six-month ban on rent increases and evictions came into force under the Sturgeon Government last October but landlords are determined to use the legal system to challenge any such continuation of this, in court.

Severe shortage of rental homes

Landlords and their representative have issued the Government with a severe warning that these sorts of interventions in the rental market are exacerbating an already severe shortage of homes for tenants in the country.

Propertymark, the professional body representing letting agents throughout the UK, the Scottish Association of Landlords and Scottish Lands and Estates, have now submitted a petition to the Scottish courts requesting a judicial review of the “temporary” legislation.

The landlord and agent representatives have dubbed the legislation “disproportionate and unfair” and warn that it is leading to an acceleration of a trend where landlords are selling up, exiting the industry, leaving tenants not only paying higher rents, but also unable to find suitable accommodation.

They argue, with some basic economic justification, it would seem, that if supply is reduced and demand is rising, rents can only go one way. And that’s leading to the squeezing out and pricing out of many desperate potential tenants.

The Scottish Government’s plans to extend the eviction ban and continue rent controls until September will relax slightly the currently imposed total rent freeze, placing a cap on the system of a maximum of a 3 per cent increases in rents.

Greens MSP Patrick Harvie, also the minister for zero carbon buildings, as well as promoting tenants’ rights, argues that these protections will benefit tenants although he admits that costs are increasing rapidly for landlords.

A safety net is to be provided such that in certain circumstances, for example when mortgage payments and/or service charges have risen dramatically, landlords will be in a position to apply to the Government for higher rent rises, up to a maximum of 6 per cent.

No restriction for social landlords

No restrictions are to be placed on the social rented sector in Scotland, apart from a voluntary agreement from councils and housing association landlords to restrict increases to below the level of inflation, currently running above 10 per cent. The Convention of Scottish Local Authorities is to commit to average rent rises of no more than £5 a week.

Propertymark has warned that a 3 per cent rent rise cap in the private rented sector would materially discourage landlord investors from staying in the industry given the level of inflation and with mortgage interest rates rising at the fastest rates in decades.

Propertymark director Nathan Emerson has said of these new extending measures:

“The legislation is being made without any clear evidence as to its need.

“Private landlords provide homes on a huge scale for people, and they must be able to cover the costs of outgoings on the property. Repairs and maintenance costs are not solely applicable for social landlords and it’s essential for landlords to be able to keep properties to a high standard in the interest of their tenants.”

The petition presented to the courts in Scotland warns that the legislation will mean that those well-off individuals, tenants renting in the private rented sector, will be given a degree of protection that is not available to social tenants who may be in strained financial circumstances.

Landlords leaving in droves

A recent survey put forward by Propertymark of its Scottish agent members shows that around 90 per cent of their landlord clients who are looking to leave the buy-to-let sector have decided on this mainly due to the current rent freeze and eviction ban. Propertymark also found a big increase in the number of landlords serving notice on their tenants to enable them to sell their properties with vacant possession.

According to property agents Hamptons International, rents in Scotland have risen at the fastest rate of any UK region. Let property rents in Scotland rose by 11 per cent in the year to December whereas nationally this figure averaged 7.7 per cent over the same period, the agent says.

John Blackwood, chief executive of the Scottish Association of Landlords, has commented on this issue:

“Landlords selling up loss making property is further reducing housing supply, despite ever increasing demand. The result is the cost of finding a new home is actually increasing for renters.

“Landlords have had enough. We must stand united to protect our property rights by challenging this unfair legislation in court,” he added.

A spokesman for the Scottish Government told The Daily Telegraph:

“We recognise the role of the private rented sector in providing homes for let and acknowledge that some costs have been rising for landlords as well as tenants. The emergency legislation passed by Parliament requires us to keep measures under regular review.

“We are not aware of a legal action being served on the Scottish ministers challenging the Cost of Living (Tenant Protection) (Scotland) Act 2022.”

Rent control controversies

Rising rents across the UK have reignited the a political discussion as whether it is effective policy to enact rent control provisions. Some politicians, such as Sadiq Khan the Mayor of London, have argued strongly that these controls are the answer to tenants’ problems, particularly in the big cities.

When introduced the rules and regulations surrounding of rent control measures vary considerably from place to place, most consisting of caps on price increases within the duration of a tenancy, and sometimes beyond the duration of a tenancy, coupled with restrictions on eviction.

Research

Much research has been conducted over many years into how rent control affects tenants and housing markets. The results invariably conclude that while rent controls of varying degrees may help tenants in the immediate term, in the short run, in the long run these measures distort market pricing and equilibrium, leading to adverse effects.

These effects include long run decreases in renting affordability, landlords leaving the sector, a fuelling of the decline of whole neighbourhoods, and a decline in the quality of housing – landlords no longer able or unwilling to afford proper up-keep and repairs.

Rent controls can also lead to a serious “miss-match” over time between tenants and rental properties. That’s because once a tenant has secured a rent-controlled home it may choose to stay put, never moving on in the future for fear of losing the low rent. This leads to a drag on an economy due to low labour mobility and leads to longer commutes for productive labour.

A study by the London School of Economics (LSE) and a report by the House of Commons Library set out a convincing case against rent controls, see here

View Full Article: Landlords to challenge Scottish rent control extension

City council launches major crackdown on revenge evictions

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Brighton & Hove Council has launched a crackdown on revenge evictions as it works towards a zero-tolerance approach to rogue landlords.

In a review of its PRS enforcement policy, the authority will look at measures to reduce the risk of revenge evictions by serving improvement notices and emergency remedial action notices as soon as possible. Councillors have agreed that where there’s a history of landlords carrying out revenge evictions following a repairs report, it will serve a pre-emptive improvement notice to protect tenants.

It is urging tenants to report the need for any necessary improvements so it can discuss steps that can be taken before it contacts the landlord. If these aren’t made, it would explore taking enforcement action.

Its private sector housing team requested improvements to 462 privately rented homes between April and December last year; following council intervention, most of these were improved by landlords without the need for enforcement action. Only 13 statutory notices or civil notices were served to bring about the necessary work.

First instance

Councillor David Gibson, co-chair of the housing committee (pictured), says it always wants to work with landlords to bring about improvements in the first instance.

“In most cases, once our private sector housing team intervenes, landlords undertake to carry out the necessary work and we ensure they do so,” he adds.

“If they fail to comply with what’s needed, we will then take enforcement action. We have already issued 550% more fines this year so far compared to the previous year.”

Brighton & Hove will also investigate setting up a rogue landlord database in the city and is considering plans to limit rent rises.

View Full Article: City council launches major crackdown on revenge evictions

NEW: Asking rents continue to rise hitting £1,172 average says Rightmove

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Average asking rents for new tenancies outside London jumped to another record high of £1,172 a month in December – although there are now signs that the pace of growth is starting to ease.

Rightmove reports that average rents for newly listed properties rose by 9.7% in 2022 compared with the previous year, although the last quarter’s 0.9% rise compared with the previous three months was the smallest quarterly increase for two years. In contrast, average asking rents in London accelerated, rising by 5.8% and setting a new monthly high of £2,480.

The lack of available properties is also showing signs of easing, as the number available to rent in December was 13% higher than the same period in 2021. New properties coming up for rent were also up 5%.

Renters rise

The number of tenants looking for a property was up by 7% last month compared with the previous year, however, competition between tenants dropped by 6% and by a third (33%) compared with the peak in September. Wales (+15%) and the South West (+13%) have seen the biggest jumps in new properties to rent regionally, which led to a slight drop in respective average asking rents of 1%. It’s the first quarterly drop for any region since the start of 2021.

Rightmove’s director of property science, Tim Bannister (pictured) says: “There appears to be some more property choice for renters compared to the record low levels of last year which would slightly ease the fierce competition to secure a home.

“This is why we’re forecasting that the pace of annual growth will ease to around 5% by the end of the year nationally, although this would still significantly exceed the average of 2% that we saw during the five years before the pandemic.”

Read more about rising rents.

View Full Article: NEW: Asking rents continue to rise hitting £1,172 average says Rightmove

Positive thinking! Six reasons for landlords to feel optimistic about 2023

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Belvoir, which is one of the largest High Street property management groups manages over 73,000 properties nationwide, and franchisees across the country are very aware of just how tough the previous years have been for landlords. No sooner did we start to come out of the pandemic than other factors began to kick in to make life even more stressful, including a cost-of-living crisis, rising mortgage rates, increased legislation, and many other unforeseen challenges to make life more difficult, particularly for DIY landlords. Nevertheless, there are glimmers of hope, and we thought it would be a good idea to focus on a few reasons why landlords might start to feel a little more positive about 2023. Here are six reasons that we hope will help to balance out those seemingly endless headline-grabbing bad news stories that are constantly in the press.

1. Rental demand is massive. With interest rates rising, and the cost-of-living crisis biting, many people are delaying buying properties. In fact, according to Aviva, up a million people may be ruling themselves out of the first-time buyer market, which means the demand for good quality rental accommodation has never been higher. Furthermore, this demand shows no sign of slowing down. In some areas there are literally hundreds of tenants going after the same property, and agents are in desperate need of more properties to offer. Where there is this kind of demand, there is also opportunity to generate higher rental yield increases, but advice should be taken to ensure affordability for tenants.
2. Is it time to increase your portfolio? Whilst it is true that interest rates have risen, and indeed, may continue to increase, they are still relatively low – especially when compared to the record rate of 17% in November 1979! As we enter 2023 property still represents an excellent long-term investment, so why not visit a professional estate agent and find out for yourself if there are any golden investment opportunities in your area. Many Belvoir agents have in-house expert MAB mortgage advisors who can help investors to prepare so that they are ready to act quickly if and when a bargain investment arises. Research by Landlord Leaders in 2022, revealed that 68% of all landlords had or were proactively planning to buy more property.
3. HM Treasury has acknowledged that self-employed individuals and landlords are currently facing a challenging economic environment. Since the transition to Making Tax Digital for Income Tax Self-Assessment (ITSA) represents a significant change for how tax is reported, the government has changed the phase in date from April 2024 to April 2026. That’s one less thing to worry about this year, although getting prepared for when the changes come in is advisable.
4. There is currently no real evidence of a downturn in the property market, but if that does happen later in 2023 there may well be opportunities for investors to buy lower priced stock. However, if you are currently a landlord who is worried about the possibility of a downturn and the subsequent consequences of job losses and rent arrears, we advise you to speak to your local Belvoir agent NOW to find out more about the best rent guarantee products on the market so that you can cover yourself for all eventualities.
5. There are ways to reduce your property overheads. For example, you could speak with your local Belvoir agent to discuss a non-obligation Building Insurance & Contents cover renewal quote. In addition, have a chat about rent reviews to ensure that your property is keeping up with market conditions. If you have a fixed mortgage that is due for renewal, talk to an MAB financial advisor to ensure that you are getting the best possible deal.
6. You are not alone! No matter what happens in the property market in 2023, you will not have to deal with everything on your own. By working with a Belvoir agent, you can take advantage of over 25 years of industry experience and will receive all the help and advice you need to ensure you remain legally compliant, reduce the risk of empty properties, and are able to take advantage of opportunities and maximise the potential of your investments.

View Full Article: Positive thinking! Six reasons for landlords to feel optimistic about 2023