Property firm reports more landlords selling up as ‘red tape’ burden rises

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Home buying company the Open Property Group (OPG) has reported a 56% jump in PRS property purchases during the past year, with landlords blaming red tape for their decision to sell up.

It bought nearly £6 million worth of property from homeowners and landlords looking for a fast and hassle-free sale in the first half of 2023 and saw a 21% rise in sales between Q1 and Q2.

Nearly 90% of these were houses with an average purchase price of £132,789, typically taking 29 days for completion.

OPG reports that despite fewer transactions taking place across the property sector, about two in five sales are falling through. As a result, more people are turning to cash buyers like OPG as the market continues to feel economic and social pressures, says MD Jason Harris-Cohen (pictured).

“We have seen a record number of completions in the first half of 2023 and unsurprisingly, we’ve also increased our rental purchase activities as landlords continue to face higher finance, management and tax bills.

“But it’s actually increasing legislation that seems to be the most common motivation for investors.”

Tenure

OPG can buy any type of property, regardless of tenure, and have bought many buy-to-let properties without the landlord needing to evict tenants.

The company works with a network of investors, auction houses and estate agents to sell some of the properties on, mostly after some light refurbishment and/or asset management.

Adds Harris-Cohen: “With no end to the cost-of-living crisis on the horizon, I expect enquires to increase for the remainder of the year. But we predict a quieter period for onward sales as we have had slightly below expected results and will be more cautiously trading to retain more capital.”

View Full Article: Property firm reports more landlords selling up as ‘red tape’ burden rises

Payday! Three tenants to share £20,000 after landlord fails to licence property

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Three tenants have won a £20,160 rent repayment order from their landlord who failed to licence his HMO.

A First Tier Property Tribunal found that Simon Freed let out the three-bedroom flat in Frognal Court, Camden (main picture), after the council had introduced an additional licensing scheme.

The tenants signed a tenancy agreement with him, trading as F&M Investments Ltd, for 12 months in September 2021, paying their £2,400-a-month rent first to the landlord and then to Vita Properties, which the court ruled was evidence that Freed was within the definition of a person managing the premises.

However, he was debarred from proceedings as he had only responded to court directions on the morning of the hearing after claiming emails had gone into his junk mail folder.

Reasonable excuse

The tribunal judge ruled that not checking his email folders was not a reasonable excuse for not complying with the directions. He also ruled that there was insufficient evidence to raise a defence of reasonable excuse.

Freed’s tenants claimed that their landlord didn’t provide a gas safety certificate, electrical installation condition report and How to Rent guide, or display his details.

They had applied for a rent repayment order of £28,800, however, as the house didn’t have any major structural or safety defects, the court made a total reduction of 30%.

The judge said: “There was some indication that Mr Freed rented other properties elsewhere, as correspondence from his former managing agents refers to them managing ‘properties’. This would suggest a slightly higher level of culpability.”

Pic: Chancellors/Rightmove

Read the decision in full.

View Full Article: Payday! Three tenants to share £20,000 after landlord fails to licence property

Your invitation to the biggest virtual property event

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On Wednesday 2nd August, 6pm to 9pm, there is a fantastic opportunity for you to connect with investors from all around the UK and overseas who you might otherwise never get to meet, as a participant in the property investors network

View Full Article: Your invitation to the biggest virtual property event

Landlord’s EPC deadline: Does anyone else feel conned?

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Have you invested thousands of pounds to upgrade your rental property to meet the proposed EPC rating of C? Or have you decided it’s too expensive to do the work and sold up? Then this week’s news from Michael Gove probably made you very angry.

View Full Article: Landlord’s EPC deadline: Does anyone else feel conned?

Council’s desperate measures to stop landlords evicting tenants revealed

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Brent Council is paying a landlord to house the tenant he was trying to evict after failing to come up with any alternative accommodation.

The authority paid the legal fees and took over responsibility for paying the rent as long as the landlord continued to let his tenant stay on in the property.

LegalforLandlords made the Section 21 application in February and possession was granted in April. Two months’ later, the letting agent which had started proceedings on behalf of its landlord client was told that, providing he was willing to halt proceedings, the council would step in to cover his costs.

LegalforLandlords MD Sim Sekhon (pictured) believes that with many small landlords leaving the sector – fearing changes in the Renters Reform Bill – Brent Council’s actions might make them pause for thought.

It could be a rare, isolated case of a council unable to prevent a homelessness case but might also be a practical solution that could work for both private landlords and tenants, he says.

No alternative

“It’s worth remembering that the private landlord in this situation agreed to the deal, but it could be that he or she had no real alternative.

“They were already out of pocket and facing a wait of many months for a bailiff. Suddenly there’s an offer made that seems to bring immediate relief and recompense. Is that a real choice?”

With a shortage of social housing, landlords could find themselves effectively forced to provide the housing that councils can’t, adds Sekhon who asks: “Will the combination of a clogged court system and the bailiff backlog drive force private landlords to retain unsuitable tenants?”

Read more about evictions.

View Full Article: Council’s desperate measures to stop landlords evicting tenants revealed