NEW: Reverse PRS policies or face ‘perfect storm’ MP warns Government

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Labour MP Chris Bryant has pleaded with the government to rethink its housing policies or face a “perfect storm of a housing crisis” in his Rhondda constituency.

He told the Commons that the frozen housing benefit cap was now “completely out of kilter with reality” for most ordinary properties and added that taxation rules for buy-to-let properties needed to be changed.

“Otherwise, we will simply lose the [private] rented sector in its totality in constituencies such as mine and perhaps in many other parts of the country,” said Bryant.

He also blamed the bedroom tax, rising mortgage rates for landlords and the burden of Welsh housing quality standards which small, 19^th century properties would struggle to meet.

“Some [private] landlords are now so nervous…that they now often insist on substantial deposits beforehand,” Bryant told MPs.

“We have heard of landlords demanding 12 months’ rent in advance. There is no way most ordinary people could possibly afford that.”

Temporary

Between 2019-20 and 2022-23, there was a 69% increase in temporary accommodation placements across the local authority, up from 598 a year to 861 and costing it £1,633,000, up from £514,000.

He reported that it was not unheard of to have 250 applications for a single social housing property as soon as it came into the system. “There is no way on God’s earth that the authority, try as it might, and as inventive as it tries to be, can meet the housing need.”

Bryant’s pleas met with a tepid response from Housing Minister Rachel Mclean who said it expected the provisions in the Renters (Reform) Bill to cover Wales as well as England.

She added: “We have delivered our £11.5 billion affordable homes programme in England, and I encourage the Welsh Government to follow in our footsteps.”

Read a guide to the Renters Reform Bill.

View Full Article: NEW: Reverse PRS policies or face ‘perfect storm’ MP warns Government

Concessionary mortgages: a solution to the housing crisis for landlords and tenants?

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More landlords looking for a quick and painless exit from the PRS are considering concessionary mortgages, it has been claimed.

These little-known mortgage deals allow a sitting tenant to buy the property at a discounted price, based on a valuation.

The seller must be willing to sell for at least 10% below market value and then gifts the deposit to the buyer in the form of equity in the property – from 10% upwards. Buyers can use some of their own cash to get a bigger deposit.

Although landlords take a hit on the selling price on the open market, selling to a tenant means no estate agent fees, a speedy no-strings sale and guaranteed rental income until the property eventually transfers over.

Wanted to sell

One couple in Gloucestershire bought their home for £279,000 when the landlord told them he wanted to sell, despite it being valued at £310,000 – a discount of 10% – and were able to add some money as a deposit to get their LTV down to 85%, securing a mortgage rate of 4.4%. Their repayments are now only slightly more than the rent.

With buy-to-let becoming less profitable, some experts have suggested concessionary mortgages could become more popular.

Plausability

Lee Grandin (pictured) of Landlord Mortgages says they’re not widespread as only a handful of lenders offer them – and they’re mainly taken up by first-time buyers.

“I’m sure it will become more common as we have a shift in moving stock from landlords,” he tells LandlordZONE.

However, Grandin adds that lenders will look at plausibility, and if a tenant is offered a property at £150,000 and given a market value of £200,000 then this would likely not be plausible.

“Likewise, if a tenant has been in situ for only two months then this looks less plausible than a tenant who has been occupying for a few years.”

View Full Article: Concessionary mortgages: a solution to the housing crisis for landlords and tenants?

Landlords will have to hike rent by £614 to make a profit

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Landlords in London and the South East will need to hike rents by a staggering £614 per month to make a profit when remortgaging at present rates.

This means that tenants could see their monthly rent leap from £1,498 to £2,112

View Full Article: Landlords will have to hike rent by £614 to make a profit

Delayed heating bill issues?

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Hello, I have an apartment in Islington which is rented out. Since completion 10 years ago, the managing company has never been able to issue the hot water and heating bills in time.

Initially, it was a few months late but now they have yet to issue 2022 bills.

View Full Article: Delayed heating bill issues?

Landlords panic to fuel BTL remortgaging searches surge

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Landlords and homeowners alike scrambled to find out how much it would cost to remortgage after the Bank of England’s base rate increase last Thursday, a data firm says.

Twenty7tec says there was a 39% surge to 40,902 inquiries compared to an average Thursday –

View Full Article: Landlords panic to fuel BTL remortgaging searches surge

Tenants pocket £16,000 after landlord and agent’s regulatory mistakes

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A landlord has failed to convince a court that stress and financial difficulties excused her from paying a rent repayment order.

Instead, Jaya Sanah’s four tenants will share £16,191 after a First Tier Property Tribunal ruled that there was no reason not to licence her four-bedroom HMO which was covered by Hackney Council’s additional licensing scheme.

Sanah didn’t provide a statement or attend the hearing and tried to adjourn it due to her ill health. This was rejected on the basis that she was only suffering from stress-related issues.

The tenants told the tribunal that neither Sanah nor her agent had given them a Right to Rent Guide, electrical and gas safety certificates, or an EPC. They believed she was a professional landlord as she had boasted to them about looking after several properties. However, despite telling the court she had financial difficulties, Sanah said this information was confidential.

Voluntarily

They had paid £2,842 a month rent in full for the two years they lived at the property in Victorian Grove, London, which they voluntarily left in August last year.

The court deducted universal credit payments to one of the tenants, leaving a £26,986 sum from their £34,104 rent repayment order application for the 12-month period.

It ruled: “The tribunal finds the respondent is or holds herself out to be a professional landlord. As such, the tribunal finds she should be or should have made herself aware of the local authority’s licensing requirements as well as the legislative requirements for landlords in the private sector.”

As the offence wasn’t the most serious and was not accompanied by allegations of harassment or attempts at retaliatory eviction, it awarded them 60% of the maximum rent prepayable.

Read the ruling in full.

View Full Article: Tenants pocket £16,000 after landlord and agent’s regulatory mistakes

Rental market reaching crisis point as ‘perfect storm’ hits landlords and tenants

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Landlord Action’s Paul Shamplina (main picture) has explained to Radio 4 listeners how an almost broken court system and higher interest rates are driving a rush in Section 21 evictions before rent reform laws kick in.

Speaking on the You and Yours programme, Shamplina said Section 21 evictions had already gone through the roof.

“I’ve been in the industry for 32 years and I’ve never known such a rental crisis. We’ve seen a 91% increase in Section 21 accelerated possession claims issued at court between April 2022 and April 2023.”

The programme featured interviews with two tenants in the same Manchester block who had been served with eviction notices before they could accept a rent rise and were now struggling to find new flats.

Biggest losers

“The biggest losers will be tenants,” Shamplina told listeners. “You will have decent tenants paying rent on time, and either landlords are putting rent up because of interest rates or they want to sell – it adds to the crisis because of a stock shortage.

“One agent had 80 applicants fighting over one property in Islington, which then becomes a bidding war.”

He added that he had never seen so many landlords selling properties as well as anti-landlord feeling in the press.

“Historically, a lot of landlords haven’t put rents up but they are panicking. A lot will be whacking in Section 21s as they feel they can’t get their properties back because the court system is on the brink of being broken.”

GUIDE: What to do if your tenant gets into arrears.

View Full Article: Rental market reaching crisis point as ‘perfect storm’ hits landlords and tenants

Sadiq Khan repeats calls for an ‘immediate two-year rent freeze’ AND S21 ban

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London’s Mayor Sadiq Khan has called for an immediate two-year rent freeze AND a ban on section 21 ‘no-fault’ evictions in London to help 160,000 Londoners who are behind on their rent.

His call comes as a survey from City Hall reveals that 30% of private renters in the capital are struggling financially –

View Full Article: Sadiq Khan repeats calls for an ‘immediate two-year rent freeze’ AND S21 ban

Landlord pays £40,000 fine after large HMO found ‘shoddy and unsafe’

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A landlord in Norfolk has payed fines totalling £40,000 after he was found to have housed tenants in a shoddy and unsafe property.

Issues were reported at the Watton property (pictured) to Breckland Council last year, which prompted an inspection by officers who found a blocked fire escape, damaged fire doors, dangerous electrics and broken and rotten windows, causing them to flag the property as unsafe.

The landlord of the property, which was home to multiple tenants, was given time to carry out repairs. However, a follow-up inspection found insufficient progress had been made so the council issued a £20,000 fine to the landlord company and £20,000 to the company’s director.

Fines paid

Work to address the issues has now been completed by the landlord who has also paid the fines which will be used to fund further investigations in the Norfolk district. The council has refused to name the landlords after LandlordZONE made enquiries because the person involved has been cooperative and the ‘civil matter has been resolved’.

Councillor Claire Bowes (pictured), executive member for housing and homelessness, says the vast majority of Breckland’s landlords provide well-maintained homes for their tenants and the quality of housing overall is very good.

She adds: “However, this case shows that the council will not tolerate a decline in housing quality or for residents to be put at risk and we will take action to protect our residents’ right to live in a safe home.”

View Full Article: Landlord pays £40,000 fine after large HMO found ‘shoddy and unsafe’

Landlord secures huge victory in £18,000 Rent Repayment Order case

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An Upper Tribunal has slashed a landlord’s Rent Repayment Order by £16,000 after taking pity during an appeal hearing on her “precarious financial position”.

A First Tier Property Tribunal had ordered Renee Daff to pay two tenants £18,000 for failing to licence her flat under Tower Hamlet’s selective licensing scheme, but a judge found the first tribunal had labelled her a professional landlord without taking her financial circumstances into account.

Daff rented out the property in Tannery House after becoming seriously ill and returned to her native Australia. After moving back for a while, she rented it out again in 2018 for six months – unaware of the new licensing scheme – and then moved back in 2019.

When the former tenants applied for an RRO, she tried to get a licence but was told the property was exempt.

Judge Martin Rodger KC said that although Daff was to blame for not finding out about her licensing obligations, there was no evidence that she had deliberately sought to avoid her responsibilities.

Interest payments

The court heard that although she owns two more flats in the UK and one in Australia, the income was no longer sufficient to service the interest on her portfolio.

The judge ruled: “While the appellant’s property portfolio is not insignificant, she has never sought to make a living from it, and to treat her as if she is running a professional letting business would be unjustified.”

He added that the circumstances of the case were exceptional as Daff was of limited means, had no earning power, and was in very poor health which had “contributed to her lack of attentiveness to her licensing obligations”.

Rodger said: “She is in a precarious financial position. In my judgment the achievement of the statutory objectives of punishing defaulters and deterring future offences does not require the imposition of disproportionate penalties.”

View Full Article: Landlord secures huge victory in £18,000 Rent Repayment Order case