Shelter demands 12 months of no re-letting in new Bill

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The Levelling Up, Housing and Communities Committee has been told that the Renters (Reform) Bill needs strengthening to prevent landlords from using a loophole to evict tenants for no reason.

The follow-up meeting heard that under the proposals

View Full Article: Shelter demands 12 months of no re-letting in new Bill

Are you a Birmingham Midshires customer?

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We remember the times when Birmingham Midshires allowed us to submit 100+ mortgage applications for one Client, in one week. Those were the days, but even now, with all of the new stress testing calculations, LTV caps, and restrictions on how many properties BM will allow you to have with them

View Full Article: Are you a Birmingham Midshires customer?

‘This is why landlords must approach guaranteed rent schemes with caution’

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An Essex landlord has learned the hard way that unpicking rent-to-rent or ‘guaranteed rent’ agreements can be a lot more difficult than many might believe.

In a case handled by the Resolution Department Lead Suzy Hershman (main picture) and her team at HFIS, a landlord who had signed up to have her detached house provide a guaranteed income through a rent-to-rent contract wanted to end the arrangement after relations with the managing agent soured.

The landlord gave the agency, which had already signed up and moved in tenants to the property, three months’ notice stating she wanted ‘vacant possession’.

But the agent declined her request, and the complaint was brought to the HFIS team for resolution.

Vulnerable

During conversations with both parties, it was discovered that the tenants living at the house had been placed by the local authority and were ‘vulnerable’ – so evicting them at short notice was neither practical nor fair.

Also, the rent-to-rent contract used here is a ‘mesne’ agreement due to three parties being involved. Mesne means ‘intermediate’ in old French – so you have a tenant, a ‘head tenant’ (or intermediate) and the owner of the property (the landlord).

Common law makes it clear that unless the original agreement between tenant and managing agent is or was unlawful – which was not the case here – then the only way to end the agreement is for the landlord to evict the ‘head tenant’ (i.e. the managing agent) and the sub-tenant (the people living in the property) through the courts.

No beef

The landlord had no beef with the family living in the property, but rather with the managing agent which she says had been maintaining the property poorly.

HFIS found that the agent had not explained to the landlord why it could not ‘hand back’ the property but, on the other hand, the landlord’s desire for vacant possession of the house was ‘unreasonable’ in the circumstances.

The landlord is left with few options now but is taking legal advice separately about how to proceed.

What are the lessons here?

• Vet rent-to-rent agencies very carefully – for example what’s their office like? How do their staff talk to people on the phone? Are they accredited and do they have valid redress membership displayed in their windows or website?

• Landlords should enter into rent-to-rent agreements with great caution and be well informed. For example, be aware that if they want to end this kind of agreement early, they’ll have to do it through the courts, assuming the initial agreement between agent and tenant was lawful and fair.

View Full Article: ‘This is why landlords must approach guaranteed rent schemes with caution’

Buy the freehold or just renew lease?

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Hello, looking for some advice from Property118 readers. I currently have a lease with 65 years left to run. The property is a house and converted into two flats.

My question is would it be a better option to buy the freehold or just renew the lease?

View Full Article: Buy the freehold or just renew lease?

Top Property Investment Strategies

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Investing in property can be an incredibly rewarding journey, offering financial stability and the potential for significant returns. Whether you dream of becoming a landlord, a savvy house flipper, or a successful property developer, having a solid investment strategy is the key to making your dreams a reality.

View Full Article: Top Property Investment Strategies

The Times wants to speak to the next generation of landlords

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The Times is looking to speak with the next generation of landlords who are still investing in buy-to-let despite challenges around interest rates, tax and regulation.

The piece will interview landlords who have recently invested in property for the first time or plan to grow their portfolio.

View Full Article: The Times wants to speak to the next generation of landlords

Agency boss to pay £8,000 after using ‘terrifying’ tactics to bully tenants

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A rogue letting agency boss who used heavies to scare tenants and misled them about their rights has been ordered to pay £8,000.

Four residents complained to Tower Hamlets Council’s environmental health and trading standards team about London Corporate Apartments Ltd (LCA), which at the time was based in serviced business offices (main picture) and had operated both as a letting agency and a landlord via rent-to-rent arrangements.

The council found LCA had issued licenses to occupy, rather than assured short-hold tenancies, which meant the tenants were misled about their tenancy deposit protection rights, and their rights as tenants, and were at risk of illegal eviction.

There were also complaints that aggressive tactics had been used to intimidate two of the tenants into leaving their properties.

Director Khaled Abed-Alrazek admitted two counts of misleading actions and one of aggressive commercial practice relating to his tenants from February 2017 to May 2018.

During this period his company was expelled from the The Property Ombudsman scheme for failing to return a tenant’s deposit and that year was also fined £5,000 for operating as a letting agency without membership of a redress scheme.

Fines and costs

He was fined £3,800 for the offences and told to pay £1,255 compensation for the two deposits that weren’t returned, along with a further £285 compensation to one victim relating to the aggressive commercial practice, in what District Judge Matthew Bone described as “a terrifying experience at the hands of bullies acting in [Abed’s] name”.

Abed-Alrazek was also ordered to £3,000 in costs. The company was dissolved earlier this year.

Councillor Kabir Ahmed (pictured), cabinet member for regeneration, inclusive development and housebuilding, says it was a difficult case. He adds: “Everyone has the right to rent a house without fear of intimidation and the correct legal rights.

“We encourage all our residents to report any dishonest landlords so we can take action.”

View Full Article: Agency boss to pay £8,000 after using ‘terrifying’ tactics to bully tenants

‘Give tenants some of your equity gains when you sell’ says Big Issue founder

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Landlords should give renters some of their equity gains when they sell up to stop the “giant tenant rip-off”, according to The Big Issue boss John Bird (main picture).

Bird believes it’s not fair that a tena.nt who has paid rent on time for many years ends up with nothing and could also have to find a new home after being served with a Section 21 noticordinarily have been able to participate in this giant rip-off of the tenant,” he writes in the latest issue. “The tax relief that goes with owning property you let out, a tax bonus to encourage investment, adds to this.”

Bird explains that the billions paid out yearly in rents don’t allow renters to participate in the grand improvement that property ownership brings to a landlord’s bottom line. 

Shooting fish

While he acknowledges that some landlords defend their position by arguing that if the property market had gone the other way, they would have been taking all the risks, he adds: “For the last 30 years making money out of buy-to-lets has been like shooting fish in barrel.”

It would be better to get more people into owning their own property so they can enjoy the fact that paying out money each month results in an increase in their personal estate, he adds.

“It would only seem fair to me if [the tenants] could get their hands on some of the value that they have created for their landlords. 

“Something must be done to end this turning of the basic need for a roof over your head into the biggest bonanza for some to make themselves wealthy. At the expense of the renter.” 

View Full Article: ‘Give tenants some of your equity gains when you sell’ says Big Issue founder

ALL agents say Scots rent cap has ‘forced more landlords to quit and pushed up rents’

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One hundred percent of letting agencies in Scotland say they have seen more landlords exiting the market since the country’s government brought in and then recently-extended a rent rise cap and evictions ban.

Agents canvassed by trade organisation Propertymark also reported an increase in landlords serving notice on tenants prior to selling up and that, in addition, landlords are now more inclined to raise rents in between tenancies to cover the additional costs created by new regulation, rising running costs and rising mortgage rates.

Only rent rises in between tenancies are allowed of more than 3%, with those during tenancies capped at that level, measures that were extended until March 2024 last month.

As an example of rising costs, while mortgage rate increases are well documented, the price of inventories has increase from £95 to £175 over the past four years, while electrical and gas safety checks have both increased by 25%.

Propertymark says all this is creating a perfect storm for tenants including less stock and therefore rising rents despite the Scottish Government hoping its temporary rules would keep rent increases to a minimum during the cost-of-living crisis.

Pressure

A spokesperson says: “Recent Housing Insight reports from Propertymark show that pressure on rents remains with 50% of responding agents reporting rents increasing month-on-month on average at their branch in April 2023, while the number of properties available to rent per member branch remained stubbornly low at nine in May.”

One agent reveals that: “In our experience all our landlords are looking to uplift by the 3%…many wouldn’t have other than for the legislation and many of our landlords have not previously raised rent through Covid etc and are now being penalised by the 3% cap.”

Read the Propertymark report in full.

View Full Article: ALL agents say Scots rent cap has ‘forced more landlords to quit and pushed up rents’

Number of home sales halved since last year

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Transaction levels have plummeted by -54% this year, according to a new report.

Research by letting agents Barrows and Forrester, reveals both transactions and total market values of homes sold, fell by more than 50% across every area of England and Wales.

View Full Article: Number of home sales halved since last year