‘Fixed term tenancies MUST be preserved within reform bill for students lets’

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A proposed ban on fixed-term tenancies could penalise students amid an already heightened rental crisis in many cities.

According to student rentals platform StuRents, if the Renters (Reform) Bill fails to preserve fixed term tenancies for students, property managers could find their student HMO portfolio slipping out of kilter with the underlying academic cycle, reducing choice for students and increasing the number of vacant properties at a time when many cities are suffering a severe shortage of affordable accommodation.

The current situation helps align the dates from which all properties can be marketed for the next academic year, says StuRents.

Property managers know months in advance when properties will be vacated, meaning all accommodation is made available on property portals around the same time, facilitating a mass clearing process that rewards good quality properties with excess enquiries and provides students with an abundance of choice.

Many landlords have already voiced fears that students will pay higher rents as landlords exit the sector. Under the proposals, students will be able to give two months’ notice at any time, making it difficult to find a replacement and putting pressure on those who might have to find a new housemate or pay more rent to compensate for the empty room.

Fears

If these landlords exit the student market, their properties will probably be acquired by institutional investors so there shouldn’t be any contraction in supply, Tom Walker, (pictured) co-founder at StuRents, tells LandlordZONE.

“Some cities have an excess supply of student beds as a whole, but a shortage of affordable properties typically rented by domestic students, so identifying supply shortages is never as clear-cut as it seems,” he adds.

“That said, cities like Manchester, Bath and Bristol that suffer from a shortage of affordable student accommodation will likely see problems exacerbated.”

These points made by StuRents and other voices within the student lettings market appear to be cutting through in Whitehall – today a national newspaper reported rumours that housing secretary Michael Gove (pictured) is considering modifications to the Renters (Reform) Act that will exclude some student landlords from the looming legislaiton.

View Full Article: ‘Fixed term tenancies MUST be preserved within reform bill for students lets’

Landlords warned about the potentially catastrophic damage caused by e-bikes and e-scooters

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From a few wisps of smoke to a toxic explosion in just 12 seconds – the damage e-bikes and e-scooters can cause are catastrophic.

With their ever-growing popularity, it’s no wonder landlords are becoming worried about how much damage they could cause to a property.

View Full Article: Landlords warned about the potentially catastrophic damage caused by e-bikes and e-scooters

BTL repossessions rocket by 28% in the first quarter

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There’s grim news for BTL landlords and homeowners alike as the cost-of-living crisis tightens its grip to push up mortgage repossessions, UK Finance reveals.

The trade body says that in the first quarter of the year, there were 410 buy-to-let properties that were taken into possession –

View Full Article: BTL repossessions rocket by 28% in the first quarter

SW city to clampdown on HMO conversions with harsher rules

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Exeter is considering extending its Article 4 direction to help manage the impact of the city’s student population.

The current Article 4 – restricting landlords’ rights to convert properties into HMOs – is in an area close to the University of Exeter’s Streatham and St Luke’s campuses.

The council hopes to enlarge this to include postcodes where student-only homes make up more than 20% of housing, or which are expected to exceed that threshold.

It would also include the university’s Streatham Campus and areas of purpose-built student accommodation bordering the affected postcodes.

It would not change exempt areas as it says this would cause severe personal hardship to homeowners, on the grounds that these streets already have a very high concentration of student properties.

New areas

The exempt areas are: Culverland Road, Danes Road, Edgerton Park Road, Hillsborough Avenue, Mowbray Avenue, Old Park Road, Springfield Road, Victoria Street and Wrentham Estate.

The authority says the changes would help to maintain a balance between student and non-student housing in the area and wouldn’t unduly restrict HMOs for non-student residents, such as lower income households and households with specialist requirements.

Exeter Council admits that one drawback is a possible increase in private rents, due to further restrictions on HMO supply.

It adds that since 2010, changes in the number of HMOs have been relatively limited and that the university expects future growth in student numbers to be slower, resulting in less demand for HMOs, although the council is not convinced this will be the case.

It is looking for feedback on four possible options in the consultation which runs until 3rd July.

Pic: Google Streetview

Read more about Exeter HMOs.

View Full Article: SW city to clampdown on HMO conversions with harsher rules

OFFICIAL: Latest evictions surge ‘due to Welsh reforms pushing out landlords’

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The Minsitry of Justice has blamed a 23% jump in the number of private landlord possession during the first three months of the year on the Welsh PRS reforms, although volumes are still below pre-Covid levels.

Quarterly figures from the Ministry of Justice show that claims increased from 19,031 to 23,395 (23%), orders from 12,966 to 17,660 (36%), warrants from 6,874 to 10,469 (52%) and repossessions from 3,809 to 6,421 (69%) compared with the same quarter in 2022.

The highest private landlord possession claim rates were seen in London.

Possession claims now sit at 77% of their pre-Covid baselines, mainly driven by private and accelerated claims. This increase was particularly noticeable in Wales where the accelerated procedure for claims, orders and warrants increased by 236%, 249% and 275% respectively.

For England this increase was 16%, 46% and 95% respectively. The MoJ says landlords exiting the sector due to the Renting Homes (Wales) Act – with more changes set to come in from June 2023 – was probably behind the rise.

Despite the increase in volumes, the civil court is managing demand, according to the government, which reports that the median average time from claim to landlord repossession is now 22.3 weeks, down from 27.3 weeks in the same period last year.

Legal aid

However, the Law Society of England and Wales warns that 25.3 million people (42%) do not have access to a local legal aid provider for housing advice.

President Lubna Shuja says it’s extremely concerned that the government is struggling to attract bids for its new Housing Loss Prevention Advice Service scheme.

“Unless we see significant and immediate investment across the legal aid system including housing, more of these schemes will collapse leaving people without help when they need it,” she adds.

View Full Article: OFFICIAL: Latest evictions surge ‘due to Welsh reforms pushing out landlords’

‘This is why built-to-rent will outperform BTL in the long term’

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Property management professional David Goldberg recently revealed that in the long term, investing in so-called ‘build-to-rent’ developments will prove to be more profitable for investors than buy to let.

He claimed that “built-to-rent looks to be a win-win for both tenants and investors alike and with more than £75 billion forecasted to be invested in this sector by 2025, it’s showing no sign of slowing down”.

Given the provocative nature of this viewpoint, we asked Goldberg, who is CEO of property firm POD Management, to explain how he has come to this conclusion.

“Yes, I believe that returns are greater in the build-to-rent sector, as opposed to buy-to-let, but only when compared over the long-term,” he tells LandlordZONE.

“The speed of acquisition and relatively low capital outlay in buy-to-let typically offers greater returns in the short-term.

Impact returns

“But factors like spread of the portfolio (i.e. where they are) and dealing with each tenancy in isolation, plus individual maintenance requirements – both reactive and proactive – impact returns.

“Also, a buy-to-let landlord can’t adapt to the changing needs of the tenant, for example moving from a 1 bed to a 2 bed apartment, or generally offer amenity, which can increase the likelihood of voids.

“Build-to-rent developments can be built to a higher quality and standard (of course depending on the individual project), provide flexibility, and often have more competitive facilities, which means landlords can demand higher rents (as they deliver tenants exceptional value), generating stronger financial returns.

“Professional landlords can offer greater security to renters and likely provide more flexible options on deposits and rental terms.

Buy to lets

However, in the short-term I believe returns are stronger for buy-to-lets.

“They can deploy capital quickly, will have less of an initial outlay on refurbishment, and quickly secure rental income. Within the build-to-rent sector, the asset owner has to acquire the land, refurbish all of the properties, and stabilise the asset, although they will continue to hold the asset, meaning they can spread this cost over a longer period and, given the advantages outlined above, achieve higher rents and thus great returns.

“Although, there are of course many factors which can affect returns, such as the operator, provided amenities, the quality of the build, and the landlord.”

View Full Article: ‘This is why built-to-rent will outperform BTL in the long term’

How to increase the profit from your property portfolio

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As we all know, thanks to the current high-interest rates, purchases of single-let properties don’t really stack up for many investors at the moment.

For those property investors who already own single-let properties on variable rate BTL mortgages

View Full Article: How to increase the profit from your property portfolio

Forged signature? Court hearing for possession claim

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Hello, I have a tenant who denied that she signed the tenancy receipt document at the court hearing in April. I tried to evict her using section 21.

The judge told her to write a witness statement that she did not sign the NRLA Tenant Receipt Document.

View Full Article: Forged signature? Court hearing for possession claim

41% of landlords see the ‘importance of EPC regulations’

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Landlords are apparently feeling the pressure over proposed environmental regulations with 41% believing it is essential to meet the planned Energy Performance Certificate (EPC) requirements, research reveals.

According to Mortgage Advice Bureau, landlords are keen to do their bit ‘for the greater good of the planet’.

View Full Article: 41% of landlords see the ‘importance of EPC regulations’

BLOG: Tomorrow and tomorrow and tomorrow – Renters (Reform) Bill heralds big changes

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In the second in a series of blogs for LandlordZONE on rental reform, Sean Hooker, Head of Redress at the Property Redress Scheme, shares his reaction to the Bill and what stands out for him.

So the wait was finally over and at shortly after 2.15pm on 17th May 2023, the Bill was presented and had its first reading.

Historic moment

For those geeky people, like me, who are into all this, we had Parliament TV on in the background waiting for this historic moment and having sat through a debate on bus funding and hearing about the problems of the number 622 from Doncaster to Keighley in what seemed reminiscent of eavesdropping on a pensioner conversation in an afternoon session of a local Wetherspoons, the bombshell was dropped and yes, like an amateur astronomer waiting hours to see an alignment of the planets, it came and was almost immediately over.  The long title of the Bill was read out by a Whip, the sponsors (MPs supporting the Bill) named and the Speaker of the House asked for the date of the Second Reading, to which the response was ‘tomorrow’. The order to print the Bill was given but it took a good half an hour more of refreshing the Parliament website, where the printed version of the Bill was to appear, for me at last to get my hands on it.

The first thing to note was yes, the name of the Bill had, as predicted, changed. However this only involved the insertion of parentheses around the word (Reform) and the dropping of the problematic apostrophe after Renters’. Yes, a senior civil servant confirmed to me, they toyed with the idea of changing the name to something akin to the ‘Rented Homes Bill’ or similar, but had reverted to the original name at the last minute. The addition of the brackets was to keep in line with the correct parliamentary convention for naming bills. It was also made clear that the delay in the presentation was done purely because of procedure, something to do with ‘Royal Protocol’ rather than any rebellion of backbench MPs, although this may come later.

Sandwiched in the news

The other thing that was obvious was the length of the Bill, just shy of 90 pages. This was after we were led to believe the Bill was to be on the light side. A lot of reading was in store! That was fine, but given that I was due to appear on the Vanessa Feltz show on Talk TV for my instant reaction to the proposals, a lot of skim reading was required to get the gist of the proposals. A mad panic and a page of scribbled notes later, I had enough for an educated comment, however as the 4pm deadline for my Zoom appearance on the TV show approached, the breaking news of a near catastrophic car accident featuring Meghan and Harry bumped the story down the pecking order and it was a further hour till my 15 seconds (almost literally) of fame. I even had to wait whilst a panel debated the merits or not of former MP Ann Widdecombe’s Marie Antoinette utterances on a cheese sandwich! What does that say about where the biggest shift in the private rental sector lies in the media’s mind?

Still, the following day and having absorbed as best as I could the fine print of the Bill, I was reassured that, as suspected, the proposals do not contain any huge surprises and the direction of travel is broadly where most informed commentators believed it was going. Yes, there were some glaring omissions, for example there is absolutely no mention of Decent Home Standards, however I have been reassured that this will be introduced, but how and when is to be decided.

Commons speak

The other thing that confused me was that despite what was said the day before, no Second Reading occurred. However, I subsequently learned that in parliamentary parlance, “Tomorrow” does not actually mean the next day but is a mechanism to get the Bill on the list of upcoming business. My apologies if myself and other commentators misled you on this and suffice to say the next stage of the Bill’s passage will not now occur until sometime after the Whitsun Recess in June or July. I love the arcane parliamentary jargon – tomorrow evidently never comes!  

What stood out for me in the Bill?  Well, of course the most detailed part of it relates to the scrapping of no-fault evictions and the introduction of new periodic assured tenancies. Of course, this is hugely important, however there are far cleverer people than me looking at this and I will politely defer to them to give their analysis in the first instance. However, two areas I want to briefly comment on at the moment, not least as I have had the most input with the Government on these, are the introduction of landlord redress and the form landlord registration will take.

A different story

Firstly, I must note that what the Government announced they are putting forward, both in their White Paper and their press release just before the Bill went live, differs slightly from what is actually in the Bill’s wording.

The press release said, “A new Ombudsman will provide quicker and cheaper resolutions to disputes, while a new digital Property Portal will enable landlords to understand their obligations and help tenants make better decisions when signing a new tenancy agreement. This will give confidence to good landlords, while driving the criminal minority out of business.”

The Bill however says they may introduce landlord redress schemes and a private rental sector database and confers powers on the Secretary of State to procure these provisions in a manner they see fit. We will therefore get both a register and redress, but when and what this will look like remains to be seen.

My view on this is that it is positive and helps address the gap in dispute resolution for tenants whose landlords do not use an agent or where the issues fall under the obligations of the landlord and not their agent. It should be emphasised that the final details of what will be put in place have yet to be revealed and the Government is still working on the model.

Happy to help

We at the Property Redress Scheme will work with them to help develop a joined up and easily accessible system that helps raise standards in the sector and provides the reassurance and protection to the tenant that is needed.

I am excited about the introduction of the Property Portal as it has the potential of improving the transparency and information available to tenants, but also allows for the opportunity to help and assist landlords, and indeed agents, to understand and comply with their obligations and be able to measure themselves on what ‘being good’ looks like. It will also make it harder for bad operators to hide and help focus enforcement effectively on those who flout the law.

Devil in the detail

Of course, the caveat is that the technology is correct and the process of registering and complying is straight forward and affordable, and we await the details of how this will be achieved in a realistic timescale as it is the lynchpin of so much of the other reforms proposed.

The Bill also introduces penalties for landlords not registering or joining a redress scheme, which is welcomed. However, as has been continuously stressed, the success of the Renters (Reform) Bill will be predicated on enforcement.

There is a huge amount of work to do and I hope and anticipate that the Government will press on with these plans as soon as possible after this becomes law and we can get on with the job!

View Full Article: BLOG: Tomorrow and tomorrow and tomorrow – Renters (Reform) Bill heralds big changes