Brum landlords slam selective licencing as council prepares to enforce rules

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Landlords in Birmingham have slammed the city’s new selective licensing scheme which some claim is unfairly targeting ethnic communities.

The scheme, which took effect at the beginning of June, affects all landlords in 25 of the city’s wards which have more than 20% of rented properties and high levels of deprivation. The council will begin enforcement work at more than 40,000 properties from September.

Liz Murphy, who lets several flats in the city centre, told the BBC she was shocked to learn of the £700-per-property fee. “At a time when margins are small and ever decreasing, many landlords may just sell up and leave the market, which is not good for the community. I would love to hold the council to account and ask where my £700 will go. We can’t see any value to this.”

Faulty logic

She added it felt “very likely” that costs would be passed on to tenants, something she described as “faulty logic” on the local authority’s part.

“I think the problem the council and the government need to understand is that if they make it more expensive and more complicated for landlords, a lot of us will just sell up and stop being landlords.”

Letting agent and landlord Mohammed Hamed also criticised the council’s approach, which he said was unfairly targeting predominantly black and ethnic minority areas.

“If it was across the board and all over Birmingham then I could understand,” said Hamed. “But if you look at the percentage of people who live in these 25 wards, it is all ethnic minority.”

LandlordZONE forum members have been equally scathing, one calling the scheme an ‘unfair tax on the PRS’.

The council has explained that it wants to ensure private properties in the poorest wards are providing fit and proper accommodation and that landlords are meeting their legal responsibilities. 

View Full Article: Brum landlords slam selective licencing as council prepares to enforce rules

Scots Ministers avoid revealing how many landlords are seeking big rent rises

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The Scottish Government has decided not to publish details of how many landlords north of the border have applied to raise their rent above the 3% maximum allowed under the country’s Cost of Living (Tenant Protection) (Scotland) Act.

This controversial legislation was first introduced in October 2022 but extended several times until March next year, capping rent rises between tenancies at 3% but allowing landlords to apply under ‘exceptional circumstances’ for rises of up to 6% if theyu’ve been ‘impacted by the cost of living crisis’ and need to recover some increased costs associated with letting their property’.

This is done via the Rent Service Scotland where there applcation is reviewed and decided. Tenants who think their rent increases are unstified can also use the service to get mediation.

The Scottish Government originally said it would publish an update on how many landlords had applied to raise rents due to ‘exceptional circumstances’ in April this year, but this has now been kicked into the long grass.

A Government spokesperson has told LandlordZONEthis is because under the rules of the Act, Ministers most recent ‘Statement of Reasons’ removes the need for this data to be released.

But it is also lilkely to be political – Scottish ministers would look compromised if, after promising to curb rent increases, a deluge of landlords had successfully applied to raise rents significantly.

One letting agent operating in Glasgow and Edinburgh, who wishes to remain anonymous, says Ministers’ desire to keep the rent rises data under wraps is becuase the “RSS will be inundated with applications and knowing the Scottish Government, it will not have the manpower in place to deal with the volume of applications it receives”.

Removal

But the Government spokesperson pointed LandlordZONE to the most recent ‘Statement of Reasons‘ report from June, which says: “The first Report was laid before Parliament on 12 January 2023 and reports [were] due three-monthly thereafter… unless there has been a Statement of Reasons laid before Parliament during a reporting period.

“The Statement of Reasons published on 27 January removed the need for a report to be laid at the end of April (per section 9(8) of the Act).

“The next formal report was therefore due to be laid by 14 July 2023, but this 2nd Statement of Reasons would once again remove the need for that report.

“The requirement to keep the provisions under review remains ongoing and we will also continue to give consideration to the evidence available to us, with interim updates on the Act being provided as required.”

View Full Article: Scots Ministers avoid revealing how many landlords are seeking big rent rises

Landlords warned over increase in unauthorised and illegal sub-letting by tenants

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Sub-letting is on the increase within the private rented sector as the cost of living crisis bites, it has been reported.

Direct Line says nearly half of all tenants who sublet rooms within their property have not told their landlord or checked they are allowed to within their rental contracts.

The insurer polled some 600 tenants within the private rented sector recently and says the figure represents an increase in the number of tenants subletting.

But Direct Line’s own advice pages make it clear that this ‘subletting’ is to a significant extent created by unauthorised rent-to-rent operators within the private rented sector.

The primarily the insurer pins this on more tenants seeking to offset the recent and ongoing rise in rents within the UK.

“With the market having seen an increase in average rents in the last year, it is hardly surprising that a larger number of renters are tempted to offset this expense by subletting their property,” says Sarah Casey (pictured), landlord product manager at Direct Line business insurance.

“Landlords and tenants need to be aware that subletting has serious insurance implications.

“Subletting is not covered under most landlord insurance policies, so it’s really important that landlords make tenants fully aware of the restrictions on the lease and maintain that communication to help prevent any breaches.

”Tenants also need to be aware that their contents insurance is very unlikely to cover any theft or damage to personal property in the event of subletting.”

The research also reveals that three quarters of tenants get away with the practice, with just 23% of landlords eventually finding out that a tenant has been subletting.

Read more about subletting and insurance.

View Full Article: Landlords warned over increase in unauthorised and illegal sub-letting by tenants

BTR makes another leap forward with £1.26 billion invested in just three months

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The UK’s build-to-rent (BTR) stock now stands at 88,100 completed homes, with a further 53,500 homes under construction and 111,800 in the planning pipeline.

Savills research reveals that in the second quarter of the year, the sector saw a record-breaking £1.26 billion invested in 18 deals for the period; 8,300 homes have been funded since the start of the year, and although BTR only makes up 1% of privately rented homes, the sector is expected to grow as new investors emerge.

Family homes are proving particularly popular, making up 58% of investments in Q2.

“In tougher economic conditions, delivery of individual houses offers diversification of investment strategy and unit-by-unit handovers meaning operations can often commence faster than larger apartment blocks which have longer delivery timescales,” says Savills.

Increasing share

BTR is also taking an increasing share of new home sales, particularly in London. In Q1, BTR schemes made up nearly half of new housing sales in the capital, according to Molior data.

“Assets in London represent a unique proposition, given multifamily makes up less than 1% of privately rented homes in the capital. With new supply inevitable, there is a window of liquidity before the next wave of capital enters the market,” the report says.

It adds that operators in the current market are learning valuable lessons when it comes to operational efficiencies, enabling them to run their assets more efficiently and limit gross-to-net losses.

“As rents increase, tenants become increasingly discerning. Operators that can deliver superior levels of service will be able to differentiate themselves in the market.

“We believe this to be the next wave of segmentation, with those operators offering the highest levels of service generating the greatest returns, as has been the case in the hospitality sector for decades.”

View Full Article: BTR makes another leap forward with £1.26 billion invested in just three months

Property Investor Awards nominations closing

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Do you want to become an award-winning property investor? Get your nominations in fast as the deadline for the Property Investors Awards is closing soon!

The deadline for submitting nominations is less than a few days away on the 31st of July.

View Full Article: Property Investor Awards nominations closing

Are subletting tenants destroying the PRS?

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Short-term letting has become extremely popular in recent years but whilst it may be one of the fastest-growing accommodation channels there is a darker side.

Tenants who sublet without the landlord’s permission can make a huge fortune by renting out a home on Airbnb whilst the landlord is left to pick up the pieces when things go wrong.

View Full Article: Are subletting tenants destroying the PRS?