EPC obtained but not provided to tenants – Is S21 valid?

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In September 2022 I served a S21 on my tenants giving 4 months Notice. They have approached the Council as they require assistance getting rehoused and have been told that the S21 is invalid because the EPC expired in 2020 and they weren’t issued with a copy of a new one.

View Full Article: EPC obtained but not provided to tenants – Is S21 valid?

Landlords hope Sturgeon exit will soften SNP’s anti-landlord approach

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Scottish landlords hope that Nicola Sturgeon’s resignation may lead to a less aggressive approach towards the buy-to-let sector.

The SNP leader has presided over a range of anti-landlord legislation since becoming first minister in 2014, including the recent rent and eviction freeze under its Cost of Living (Tenant Protection) Act in a bid to protect landlords, prompting some investors to quit.

Exact opposite

The Scottish Association of Landlords says restrictions have had the exact opposite of their intended effect – reducing investment, pushing landlords out of the sector, reducing supply and driving up costs which have led to higher rents. 

It’s a view echoed by David Alexander, CEO of DJ Alexander Scotland. “There has too often been a confrontational approach to the private rented sector in Scotland and this was part of the reasoning which produced the recent rent freeze and ban on evictions,” he says.

Conciliatory

Alexander hopes that the next Scottish leader will adopt a more conciliatory, reasoned approach and will encourage growth in the PRS.

“I think the new leader of the SNP needs to understand that the private rented sector is an essential and integral part of the housing market and that this sector will be improved by working closely with those involved in investing, in letting, and in renting homes in Scotland,” says Alexander.

“Only in this way will we have a system that works for landlords and tenants.”

Last month, the Scottish Association of Landlords, Scottish Land and Estates and Propertymark submitted a petition to Edinburgh’s Court of Session, seeking a judicial review of the Scottish government’s rent control and eviction ban legislation. 

View Full Article: Landlords hope Sturgeon exit will soften SNP’s anti-landlord approach

HMRC and Family Investment Companies

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In 2022 there were over 50,000 property investment companies formed but less than 1% of them were Family Investment Companies despite HMRC having given this form of business continuity and legacy planning the thumbs up in the previous year. In this article

View Full Article: HMRC and Family Investment Companies

NEW: Tenant arrears drop to lowest level in five years as voids reduce too

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The number of landlords whose tenants are in rent arrears has fallen to its lowest level since 2017, according to new research from Paragon Bank.

Its poll of more than 750 landlords found that less than one third (32%) of landlords have had at least one tenant in arrears during the previous 12 months.

This follows a fall from 34% in the previous quarter and marks the lowest level of rent arrears in six years, when the metric was first tracked in its current format.

Void periods

The number of landlords reporting void periods also fell in Q4 2022 as fewer than one in four (24%) landlords experienced a vacant rental property, a drop of 4-percentage points on the previous quarter.

The average void duration fell from 82 to 70 days during the same period, with landlords managing larger portfolios – those with 11 or more lets – having properties vacant for even shorter periods of 44 days.

Richard Rowntree, Paragon’s MD for mortgages, says a reduction in voids is unsurprising given the demand for privately rented homes, also at record levels.

“This adds further weight to the argument for investment in affordable housing across all tenures, something that buy-to-let landlords should be recognised for making an essential contribution towards.”

He adds that although rent arrears are falling, the cost-of-living crisis won’t impact all tenants in the same way, and that it is likely paying rent will be a real challenge for some.

“From speaking to landlords, we also know that many have good relationships with their tenants and are often open to working with them to overcome any financial issues,” says Rowntree.

Read more: How rent repayment plans can work.

View Full Article: NEW: Tenant arrears drop to lowest level in five years as voids reduce too

Landlords reporting rent arrears and void periods all down

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Paragon Bank commissioned a survey of over 750 landlords by BVA BDRC, which has reported a decrease to 32% of landlords confirming that they have had at least one tenant in rental arrears during the previous 12 months.

This is down from 34% against the previous quarter and is the lowest level of rent arrears since it was first tracked six years ago.

View Full Article: Landlords reporting rent arrears and void periods all down

Landlords spending thousands of pounds more than expected on EPC improvements

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Landlords have spent nearly £9,000 on improvements to meet proposed EPC requirements, according to new research. 

The findings from Shawbrook Bank reveal that landlords have spent an average of £8,900 so far on improvements – which is almost 50% more than they had expected they would need to spend.

View Full Article: Landlords spending thousands of pounds more than expected on EPC improvements

Dangers of rent-to-rent highlighted by landlord’s £11k rent repayment order

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A rent-to-rent landlord operating a flat in central London has been ordered to pay rent back to his tenants totalling just over £11,000 via a rent repayment order or RRO.

The case highlights the challenges faced by rent-to-rent agreements, as the case involved a freeholder, leaseholder, landlord and a managing agent.

The landlord – David Ravelo – who operates the four-bedroom maisonette close to Euston Station that housed the five tenants, must foot the bill after a First Tier Tribunal judged that he had operated the property as an HMO without a licence.

The local council, Camden, has operated a borough-wide additional licencing scheme since 2015.

HMO licence

Ravelo’s five tenants, who each paid £800 a month, claimed their rent back for between five and 12 months up until 1^st December 2020, when an HMO licence was finally secured for the flat.

Revelo admitted that the property did not have a licence before that date, but claimed he had a ‘reasonable excuse’, saying that his managing agent “unequivocally misinformed him as to the current licensing status of the property”.

This was rejected by the Tribunal, which said “he has experience of other properties requiring HMO licences and was fully aware not only of the requirements but also how to check that those requirements had been met”.

The court heard that Ravelo considered the property to be in an ‘excellent condition’ and that the tenants said they had a good relationship with their landlord who was a ‘lovely person’. But they said he was too slow when it came to repairs and maintenance issues, including a major infestation of ants and mound in one of the bedrooms.

Ravelo’s bill could have been much twice as much – some £20,000 – but the Tribunal awarded a 50% reduction on the RRO because the offence was in the ‘mid-range’ of seriousness. Deductions were also made for the utilities that Ravelo paid for as part of the tenancy agreements.

Read the judgement in full.

Read advice on licencing. 

View Full Article: Dangers of rent-to-rent highlighted by landlord’s £11k rent repayment order

Official ONS report on house price inflation

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Average UK house prices reached £294,000 in December 2022 – £26,000 higher than 12 months ago, according to the Office for National Statistics (ONS). 

The latest UK House Price Index from the ONS revealed average UK house prices have increased by 9.8% in the last 12 months to December 2022

View Full Article: Official ONS report on house price inflation

WARNING: Judge tells landlord ignorance is no defence against licencing fine

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A landlord has lost his appeal against a fine for renting out unlicensed properties after arguing that the seller’s solicitor had failed to tell him about a selective licensing scheme.

City Estate Holdings bought two houses in Westbourne Avenue, Gateshead, at auction in April 2020, and let them out in August. In November, the council told it both properties needed a licence, which owner Michael Kosmas applied for three days later. However, the company was fined more than £9,000 in July 2021.

A First Tier Property Tribunal found that Kosmas was unaware of licensing requirements and that it had been “entirely reasonable” for him to rely on his professional advisers, which gave him the defence of reasonable excuse. It said that even with this, “the imposition of a civil penalty would have been unnecessary to achieve the objects of the licensing regulations”.

Solicitors

Kosmas had described himself as a professional landlord but acknowledged that he was “unlikely to be able to keep up with the changing regulations applicable to rented property”. He said the seller’s solicitors, along with his firm’s own solicitors, failed to tell him about licensing requirements.

At appeal, Upper Tribunal Judge Elizabeth Cooke, who is also President of the Property Litigation Association, said City Estate Holdings could have instructed its solicitors or a letting agent to find out and advise it on the regulatory position about letting the property.

She said that being a good landlord might go towards mitigating the amount payable in a financial penalty, “but it does not amount to the sort of exceptional circumstance that might justify a decision not to impose a financial penalty where it is proved beyond reasonable doubt that the offence has been committed and the respondent has failed to establish the defence of reasonable excuse”.

Another First Tier Property Tribunal will now decide on the size of the fine.

Read more about landlord fines.

View Full Article: WARNING: Judge tells landlord ignorance is no defence against licencing fine

Fire safety tax for developers could ‘curb UK home building’

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The top five UK home builders are likely to be disproportionately hit by hefty taxes, according to Bloomberg Intelligence. 

Large UK home builders such as Taylor Wimpey, Bellway and Berkeley are likely to be hit by heavy taxes (80% of the industry levy) for fixing apartment-building safety issues

View Full Article: Fire safety tax for developers could ‘curb UK home building’