Paragon Bank cuts buy to let mortgage rates for landlords

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Paragon Bank has unveiled a major product refresh that has seen rates reduced across 22 buy to let mortgage products, with fixed deals now starting at 4.59%.

The rate cuts apply to a range of loan-to-value (LTV) bands for both portfolio –

View Full Article: Paragon Bank cuts buy to let mortgage rates for landlords

Landlords doubt Government’s planning reforms will deliver 1 million new homes

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After the government announced a review of permitted development rights in a bid to shake up planning rules and build one million new homes in England by the end of the current Parliament, landlords say they doubt the move will deliver the homes.

View Full Article: Landlords doubt Government’s planning reforms will deliver 1 million new homes

Planning reforms won’t solve housing crisis, landlords tell Gove

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The Government’s proposed planning reforms won’t help build the promised one million new homes in England, landlords have told a new survey.

Earlier this summer, Housing Secretary Michael Gove (main picture) announced a review of permitted development rights, setting out plans to make it easier to convert large shops and offices into homes. 

However, Mortgages for Business’s poll of several hundred buy-to-let landlords found only 7% believed the reforms would be successful, while 59% thought the results were “unlikely to scratch the surface”.

Another 19% thought the reforms could make the housing shortage worse, by focusing attention on building homes in cities.

“Britain needs more homes to fulfil more dreams of home ownership and increase choice for renters,” says MD Gavin Richardson (pictured, below).

“It’s great that these proposals mean that fewer empty shops or offices are left gathering dust while we have an urgent need for more homes. But on their own, a review of the rules around permitted development rights is not going to achieve very much.”

Brownfield

Gove also promised to create city development corporations with the power to buy up brownfield land and sell it on to housing developers. However, when asked if the country could tackle the housing crisis by building on brownfield sites alone, only 24% of landlords agreed.  

“Building in Birmingham, Manchester and Liverpool is not going to solve the housing shortage in the South East. To do that, we are going to have to build on London’s green belt. Until we accept the need for a ‘green and brown belt’ around London, the South East will continue to be short of homes, which will, of course, support the business plans of thousands of landlords,” adds Richardson.

View Full Article: Planning reforms won’t solve housing crisis, landlords tell Gove

Daily Telegraph wants to speak to landlords who have built successful portfolios 

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Are you a landlord or holiday let owner who has built a successful portfolio and want to share your story? Then, Alexa Phillips, the personal finance reporter, for The Telegraph would like to speak with you.

Alexa wants to speak to landlords and holiday let owners who have built successful portfolios and would be happy to share their experience of how they did it.

View Full Article: Daily Telegraph wants to speak to landlords who have built successful portfolios 

Payday! Renters share £28,000 after landlords fails to licence their HMO

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A rogue landlord who ignored mice and mould at his unlicensed HMO has been slapped with a £28,600 rent repayment order.

His five tenants not only found Mohammed Shofiq Ali Shamsu hard to contact, but also complained of a long list of problems he failed to properly rectify, a First Tier Property Tribunal heard.

Tenants put up with a mouse infestation in the kitchen at the three-bedroom terraced house in Osric Path, Hackney, (main picture) along with exposed wires, broken front door, nails in the stair carpet, a leak from the bathroom, and persistent mould.

There were no fire doors or access to the bins and the property had not been cleaned or cleared when they moved in.

Difficulties

Although they lived at the address for the 12-month term of the tenancy, they did not pay one month due to the difficulties of contacting their landlord.

The tribunal could only make an order for 11 months’ rent but found that it was “a serious and deliberate default” which warranted the maximum penalty – particularly as Shofiq Ali Shamsu had not engaged with the tribunal process.

Importance

Judge Nicol said this suggested the landlord did not realise or understand the importance or significance of licensing – as a way to provide an audit of the safety and condition of the property and of the landlord’s management arrangements.

Without that audit process, a landlord could save significant sums of money by not incurring various costs such as a fire risk assessment and smoke or heat alarm, the judge said.

“Not getting licensed means that important health and safety requirements may get missed, to the possible serious detriment of any occupiers.

“RROs must be set at a level which disincentivises the avoidance of licensing and disabuses landlords of the idea that it would save money.”

Read more about rent repayment orders.

View Full Article: Payday! Renters share £28,000 after landlords fails to licence their HMO

August sees rents remaining red hot

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The rental market remained ‘boiling hot’ in August, with the cost of rent up 10% year-on-year, according to the latest rental index from Goodlord.

Despite average rents dropping slightly after a record-breaking July – where average prices went over the £1,300 mark for the first time –

View Full Article: August sees rents remaining red hot

Gas shortage supplies this winter?

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Hello, just watched a video by Nigel Farage who was talking about Europe filling up its gas tanks with LPG from Russia. A big point was we haven’t in the U.K. filled those tanks.

So it got me thinking.

View Full Article: Gas shortage supplies this winter?

NRLA reveals two iniatives to help landlords run properties better and avoid fines

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The National Residential Landlords Association (NRLA) has launched two new initiatives that will help members manage their properties better and also be compliant with the myriad red tape now criss-crossing the sector.

The initiative follows the NRLA’s acquisition of Safe2, a property safety certification business, and the launch of its own property management platform, Portfolio.

Safe2 provides landlords with a single platform to ensure gas, electrical safety and energy performance certificates are up to date, and NRLA members will get a 5% discount when using the service.

Tenancy management

Portfolio is an online property management tool which is free for all members designed to make the lettings process more efficient by providing landlords with a single place to manage all aspects of a tenancy.

This includes creating tenancy agreements, organising property viewings, managing communications with tenants, and ensuring landlords are compliant with their legal obligations.

As well as offering a single way to access all the NRLAs range of services, landords will be able to use Portfolio to advertise rooms and properties to let on Rightmove and Zoopla.

“The vast majority of landlords already provide safe and decent housing.,” says Ben Beadle (pictured), Chief Executive of the NRLA.

“But with major reforms to the sector on the way, we want to make it easier for landlords to meet all their legal obligations, manage their properties and provide the best service possible to their tenants.

“The investment being made by the NRLA in new technologies and digital services will help us to achieve these objectives.”

James Kent, MD of Safe2, adds: “Today’s announcement is a great step forward and demonstrates the NRLA’s commitment to giving landlords all the tools they need to ensure the properties they rent remain safe.”

View Full Article: NRLA reveals two iniatives to help landlords run properties better and avoid fines

NRLA wants you to run your properties better and avoid ‘red tape’ fines

admin    Uncategorized     agents

The National Residential Landlords Association (NRLA) has launched two new initiatives that will help members manage their properties better and also be compliant with the myriad red tape now criss-crossing the sector.

The initiative follows the NRLA’s acquisition of Safe2, a property safety certification business, and the launch of its own property management platform, Portfolio.

Safe2 provides landlords with a single platform to ensure gas, electrical safety and energy performance certificates are up to date, and NRLA members will get a 5% discount when using the service.

Tenancy management

Portfolio is an online property management tool which is free for all members designed to make the lettings process more efficient by providing landlords with a single place to manage all aspects of a tenancy.

This includes creating tenancy agreements, organising property viewings, managing communications with tenants, and ensuring landlords are compliant with their legal obligations.

As well as offering a single way to access all the NRLAs range of services, landords will be able to use Portfolio to advertise rooms and properties to let on Rightmove and Zoopla.

“The vast majority of landlords already provide safe and decent housing.,” says Ben Beadle (pictured), Chief Executive of the NRLA.

“But with major reforms to the sector on the way, we want to make it easier for landlords to meet all their legal obligations, manage their properties and provide the best service possible to their tenants.

“The investment being made by the NRLA in new technologies and digital services will help us to achieve these objectives.”

James Kent, MD of Safe2, adds: “Today’s announcement is a great step forward and demonstrates the NRLA’s commitment to giving landlords all the tools they need to ensure the properties they rent remain safe.”

View Full Article: NRLA wants you to run your properties better and avoid ‘red tape’ fines

Landlords are not evil says buy-to-let mortgage lender, Paragon Bank’s chief

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In a recent interview conducted for The Sunday Times, Nigel Terrington, the chief executive of Paragon Bank for the last 28 years, says he has witnessed the growth and indeed the boom in buy-to-let lending over his lengthy career with the bank, but that myths surround buy-to-let.

Having weathered many storms throughout his long career, in particular the financial crisis of 2007-8, which nearly brought down his organisation, he sees the current housing crisis as serious but not insurmountable for landlords.

Landlords leaving

Some landlords are leaving the private rented sector he acknowledges, due to an ever more complicated regulation regime, increased taxes and rapidly rising mortgage rates, which among other factors are bringing down house prices and driving up rents.

Despite this, Terrington remains bullish about the future for the private rented sector and Paragon. He wants to dispel what he says are the “myths” surrounding the role that buy-to-let and the private landlord plays.

Reflecting on the view that although some amateur landlords are leaving, most professional landlords – those with portfolios of properties as opposed to just one or two – and the ones his company targets, Terrington is confident that these landlords will survive and thrive.

The myths

“Its deep rooted in the British psyche, if you go back into black and white movies you had the evil landlord with his top hat and his big evil moustache throwing the widow and child out in the cold. And then in popular TV terms you had [sitcom] Rising Damp and [the miserly landlord] Rigsby. You can laugh at it but it settles in people’s psyche,” says Terrington.

Buy Mr Terrington is not laughing when he sees buy-to-let, which is obviously close to his heart, as an incredibly misunderstand product. A product that has seen his company deliver 75,000 mortgages and spawned a whole new industry since the advent of the buy-to-let mortgage more that 20 years ago. This industry he also sees as the focus of another great myth: the perception that investing in buy-to-lets is risky.

According to paragon’s experience says Terrington, over a 25 year history, mortgage arrears [debt] by buy-to-let landlords have actually been lower than those for owner occupier mortgage holders in every year, but just one.

It’s been tough for landlords and for tenants

Nevertheless Mr Terrington acknowledges there’s been an exodus of private landlords faced with a less favourable tax regime and, more recently, rapidly rising mortgage costs after thirteen consecutive bank rate rises to 5.25 per cent.

The resulting lack of supply in the sector is making tenants’ lives difficult with costs having to be passed on in terms of rent rises and a scarcity of rental accommodation that means that every vacancy is literally being fought over. Rents have risen by 5.3 per cent in the year to this July, the biggest jump since the Office of National Statistics started monitoring rents in 2016, and last year according to NRLA figures, 153,000 landlords left the private rented sector last year.

The Section 24 tax changes introduced by George Osborne, the then Chancellor in 2017, gradually reduced the amount of mortgage interest relief landlords could claim to zero. This was replaced with a tax credit of 20 per cent, but its tax effect on income for landlords with mortgages, especially for higher rate tax payers, was quite dramatic. Couple this with higher mortgage repayments and some landlords a barely making a profit.

For a man who coaxed his company through the banking crisis in 2007 by sending out a copy of Rudyard Kipling’s poem “If”, in order to encourage his executive team to “keep your head when all about you are losing theirs” he sees the current crisis as a mere blip in his company’s history, though he is concerned at the myths and the amount of legislative red tape landlords face.

There are 168 separate pieces of legislation extant, and with the anxiously awaited Renters Reform Bill that will add another layer of complexity and restrictions, for example it will make it more difficult to evict tenants.

The professional landlord

As Mr Terrington says, many of the larger professional landlords his company fiances are less affected by some of the punitive tax measures that many of the small-scale one or two property landlords face. That’s because they operate though limited companies.

It’s debatable whether a landlord with just one or two properties would benefit from incorporating, operating through a limited company. It would be expensive for most of these operators to transfer an existing investment property to a company. There is stamp duty to pay on transfers and potentially capital gains tax as well, when the property is sold to a company. Accountant’s fees a quite a bit more expensive for limited company accounts, as opposed to completing tax returns for personal accounts.

Despite all of this Terrington, as you might expect, being in the business he’s in, is optimistic for the future of buy-to-let landlords, especially for those operating at some scale, on a professional level with a small to medium size portfolio of properties.

The economics still stack up

With average rents around 7 per cent of the values of the property, and mortgage rates of 5.5 per cent, says Terrington, things don’t look all that great, but as he says, landlords don’t borrow on the full value of the property – the average Paragon customer around 63 per cent – a 3.5 per cent return is easily achievable. There’s also a large cohort of landlord who own their properties outright giving them a large cushion against the present economic difficulties, while enjoying the ability to pick and chose their tenants.

But the icing on the buy-to-let property investment cake is the ability of the rental income to maintain its value against inflation. With rents rising roughly in line with wages, around 30 per cent over the last five years, and on top of that landlords gain from the steady increase in the value of their rental properties over time.

View Full Article: Landlords are not evil says buy-to-let mortgage lender, Paragon Bank’s chief