Plea for government to help ease growing landlord costs

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Plea for government to help ease growing landlord costs

The government is being urged to intervene and help landlords as buy to let borrowing costs rise, adding fresh pressure to rents and landlord finances.

The National Residential Landlords Association points to an analysis from Moneyfactscompare.co.uk which found that landlords are paying an average £1,100 more a year than in January.

That’s down to market shifts linked to conflict in the Middle East feeding through into costs.

At the same time, landlords are contending with a series of further financial demands.

Those include a planned increase in income tax on rent from next year is expected to feed directly into higher rents, according to the Office for Budget Responsibility.

Landlords need help

The NRLA’s chief executive, Ben Beadle, said: “Whilst the government cannot be held responsible for the impact of the conflict in the Middle East, it should take action where its own policies will lead to higher rents.

“Growing taxes, uncertain costs associated with the Renters’ Rights Act and the ongoing housing benefit freeze will create the perfect storm for tenants.

“With so many people reliant on the sector for a place to call home, ministers need to recognise the real-world consequences of their decisions.”

He added: “It is simply stereotyped nonsense that every landlord can somehow absorb ever-increasing costs indefinitely.

“They can’t, and as a result, it is tenants who will suffer most as rents continue to creep up.

“The government needs to take action to support renters and ensure a healthy, vibrant market.”

Other costs to absorb

The NRLA also says that there is also uncertainty around the cost of joining the proposed Private Rented Sector Ombudsman and database under the Renters’ Rights Act.

Also, landlords may need to spend up to £10,000 per property to meet new energy efficiency requirements.

The organisation says most landlords cannot absorb these increases without raising rents.

It points to HM Revenue and Customs data shows average declared rent income for unincorporated landlords stands at £19,400 a year.

That figure sits below earnings from a full-time minimum wage role, limiting scope to offset higher costs.

Solutions for government

There’s also an issue for tenants on lower incomes who are facing rising rents while housing benefit rates remain frozen.

Calls for rent controls have been made, yet the NRLA said such measures would restrict supply.

Zoopla reports almost five tenants competing for each available home to rent.

The association is calling for changes to reduce cost pressures, including scrapping the planned tax rise and keeping new regulatory costs as low as possible.

It also wants reform of the tax system to support energy efficiency improvements and for the unfreezing of housing benefit rates.

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Council row almost leaves tenant and child homeless with more tenants to be evicted

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Council row almost leaves tenant and child homeless with more tenants to be evicted

A dispute over Gas Safety rules and selective licensing nearly left a parent and child without a home but more tenants are facing Section 21 notices.

The landlord, Mick Roberts, says he is fed up with struggling to get Nottingham City Council employees to understand housing law.

He says the situation escalated after council officers challenged the validity of a property’s Gas Safety certificate.

That came despite changes introduced in April 2018 allowing checks to be carried out up to two months before its expiry without altering the renewal dates.

Council won’t listen

Mr Roberts also says tenants are being forced to make repeated visits to council offices to resolve issues, claiming one tenant made three separate trips with five children.

Each of those trips involved hours of travel, only to be told that the tenancy documentation was insufficient before later being accepted unchanged.

He told Property118: “I am serving 10 Section 21s the next month, but hopefully if the council get the paperwork right, most tenants will be able to stay with the new landlord buyer with assistance from the council on deposit and rent up front.

“Twenty years ago, I let tenants move in and pay me at the end in four weeks or 12 weeks when the housing benefit started paying in arrears.”

He added: “I want the council to get their understanding of the paperwork right to save this 20 hours or so it took me last week on very simple case.”

Mistakes happen

Mr Roberts continued: “I understand that mistakes happen and sometimes people don’t know all the rules to start with.

“But it is so annoying when the council sticks to their guns and will not be open to listening ‘just in case they are wrong’.”

The Nottingham landlord pointed to the Gas Safety Regulations, which allows a new certificate to retain its original renewal date if completed within a two-month window before expiry.

He said the council’s interpretation has delayed rehousing efforts.

Alongside the certificate dispute, Mr Roberts said council officers requested a selective licence for a property where no tenant was in place.

He argues that under the rules, this requirement does not apply until a property is occupied.

Council don’t know rules

Mr Roberts said: “The council is also asking for a selective license before the tenant has moved in.

“This is incorrect and the fact that no one in the council appears to know the rules is making me poorly.”

In that case, Mr Roberts responded by stating the tenant had already been rehoused and the property was empty, questioning why licensing requirements were being pursued.

He also raises the cost implications of licensing when the sale of a rented property is in progress.

Applying for a licence for an empty property means spending £900 which would then, perhaps a week later, become invalid once ownership changes.

Selective licence issues

If it was to remain a rented home, it would require a new application and fee from the incoming landlord.

He told us: “I spend £900 for one week, then a new landlord has to spend £900 again. It’s bonkers.”

He has also asked Nottingham City Council: “Have you any idea how many times selective licensing are wrong?”

He added that delays in resolving the Gas Safety certificate issue had taken several days despite the documentation being compliant.

Mr Roberts has now warned the council that unless the situation is resolved soon, he plans to serve around ten Section 21 notices in the coming weeks.

Nottingham City Council has been contacted for comment.

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UK house prices rise in March – Nationwide

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UK house prices rise in March – Nationwide

Annual UK house price growth reached 2.2% in March, up from 1% in February with values also rising 0.9% month on month, Nationwide reveals.

The average price climbed to £277,186 in March from £273,176 the previous month.

Robert Gardner, the lender’s chief economist, said: “The pickup in house price growth suggests that the market had regained momentum after the slowdown recorded around the turn of the year.

“However, the sharp rise in global energy prices in response to developments in the Middle East represents a significant shock to the global economy, clouding the outlook.”

Housing affordability reversed

He continued: “In the near term, UK economic growth is likely to be slower and inflation higher than previously expected, although ultimately the impact will depend on the duration of the shock as well as the policy response.

“The outlook for interest rates is particularly uncertain and dependent on whether the demand or supply side of the economy is more adversely affected.”

He added: “If sustained, this could reverse some of the improvement in housing affordability that has taken place in recent years.

“With consumer sentiment also likely to be dented by the uncertain outlook and the prospect of rising energy costs, housing market activity is likely to soften.”

House price growth

Nationwide’s quarterly data showed most regions recorded annual price growth, although gains were limited in several parts of England.

Two regions posted annual declines in Q1, with outer South East down 0.7% year-on-year and East Anglia falling 0.4%.

Elsewhere, growth remained below 1% in the West Midlands, East Midlands and the South West.

Northern Ireland recorded the strongest performance, with prices rising 9.5% over the year.

This compared with 1.5% across the UK in Q1 and 3.3% in the North West, the next strongest region.

Scotland recorded annual growth of 3.0% in Q1, up from 1.9% in the previous quarter, while Wales saw prices increase 2.7% year-on-year.

In England, annual growth slowed to 0.9% from 1.2% in Q4.

Northern regions including the North, North West, Yorkshire and the Humber, East Midlands and West Midlands saw prices rise 1.5% year-on-year.

The North West remains the strongest performing English region at 3.3%.

Property sector reaction

Karen Noye, a mortgage expert at Quilter, said: “Today’s figures capture the early stages of the repricing that has taken place in mortgage markets since the start of the Iranian conflict.

“While some resilience in house prices appears to have remained for now, momentum will likely soften in the months ahead as higher mortgage rates and increased economic uncertainty weigh on buyer confidence.”

Nathan Emerson, the CEO of Propertymark, said: “An uplift in house prices will be welcomed by the market and suggests that buyer demand remains resilient despite ongoing economic headwinds.

“Improved sentiment, coupled with marginally better affordability conditions earlier in the year, appears to be supporting price growth.”

Tom Bill, the head of UK residential research at Knight Frank, said: “The impact from the Middle East conflict on the housing market is still in the post.

“The fact mortgage offers last for six months means the effect of higher borrowing costs will filter into the market this spring and summer, putting downwards pressure on prices and transaction volumes.

“The longer-term impact hinges on the intensity and length of the conflict.

“That said, one mitigating factor is the amount of equity in the system and the fact more homes are now owned outright than with a mortgage.”

Jason Tebb, the president of OnTheMarket, said: “This data shows just how much market activity and sentiment continued to pick up at the start of this year, with buyers and sellers proceeding with their moves with more clarity and confidence.

“While interest rate rises, rather than previously expected reductions, seem increasingly likely depending on inflationary pressures, six interest rate cuts in the past 20 months have greatly assisted affordability and put borrowers in a stronger position.”

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