Overgrown Magnolia tree results in loss of view!

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Hello, I am told that in English law there is no such thing as a legal right to a view, (established in Aldred’s Case 1610). However, if a tree is allowed to grow uncontrolled and too large, resulting in the loss of a valued view

View Full Article: Overgrown Magnolia tree results in loss of view!

INTERVIEW: Why one of UK’s biggest PRS landlords sold off their properties

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Scots entrepreneurs Graeme and Leanne Carling were one of the most successful landlords of the late noughties, taking advantage of the weakness in the property market following the global financial crash to build a bricks-and-mortar empire worth £200 million.

This made their company, the Carling Group, at one point one of Scotland’s biggest private residential landlords.

But while some landlords in their shoes would be happy to rest on their laurels, Graeme tells LandlordZONE that it was always their plan to pivot into other areas of business related to property once it was no longer possible to extract value from the private rented sector (PRS).

He says the Scottish Government’s greater regulation of the PRS hastened these plans and in 2019 the couple decided to start exiting the market.

“We’d seen our net income per unit dropping and realised we were going to have to double the size of our portfolio to make the same income as we were back in 2009-2011,” he says.

“It was just getting too tough and we’d been to some meetings with the Scottish Government during which you were frowned upon as a small-time landlord, and to a certain extent you still are, and it was clear that legislators wanted to professionalise the sector and squeeze the smaller landlords out.”

So after an initial attempt to scale up was thwarted by a lack of properties for sale that offered appropriate margins, the Carlings began to sell off their PRS properties.

They still ahve some left which are mostly those with long-term tenants, along with some student and workforce accommodation.

PRS halted

“We’ve halted the PRS stuff and I am glad we did,” he says. “I think the market ‘going corporate’ was and is the right way to go for the PRS – it needs professionalising including via better regulation and anyway in Scotland, we’re up against a huge social housing sector which has access to cheaper funding and grants.”

So how is the Carling Group going to make its profits in the future? The firm has been using its property disposal cash to buy up building services companies in Scotland and England, all part of a plan to create a large group with competencies across the board that can help the UK upgrade its buildings across all the different sectors including residential.

“It’s a big opportunity because there are not many buildings in the UK that won’t need some sort of work done to them to meet the new EPC standards,” he says.

“We see that as a huge market and something we know about as a substantial property owner including maintenance and upgrades. You can say we’ve flipped sides.

“Despite the distractions of the economy and politics, that 2030 EPC date is still there and that’s why we’re looking to acquire buildings services operators across England so we can combine these businesses and tender and quote and win some of the substantial government works within the existing built environment 

“We want to become a national operator – that’s out real focus at the moment.”

View Full Article: INTERVIEW: Why one of UK’s biggest PRS landlords sold off their properties

Michael Gove hints at cash help for tenants to pay rent

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Families struggling with the cost-of-living crisis could receive a cash boost so they can pay their rent, Michael Gove has hinted.

The Levelling Up secretary was speaking on the ‘Sunday with Laura Kuenssberg’ show when he revealed that ‘targeted support’ could be on the table to help families pay their private landlord.

View Full Article: Michael Gove hints at cash help for tenants to pay rent

Help! I didn’t protect the tenancy deposit

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Hello, We let our property to a couple with a baby in 2019, with 90% of their rent paid by the council through a housing benefit.

They immediately fell into arrears, not paying the rent at all, so the council told me they would pay the 90% direct to me.

View Full Article: Help! I didn’t protect the tenancy deposit

Guarantor Issue?

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Hello, We agreed to be guarantor for our son’s ex-girlfriend as she was having his baby. Subsequently, it has turned out not to be his.

My question is, we are now getting to the end of the first year of tenancy and I contacted the agent to say to we will no longer be guarantor and could they confirm this.

View Full Article: Guarantor Issue?

Would you like a Success Blueprint to follow?

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Would you like your next property acquisition to be a high cash-generating HMO (House of Multiple Occupation), but don’t know how to do it?

You should be considering HMOs because they are a recession-proof strategy and also generate high cash flow

View Full Article: Would you like a Success Blueprint to follow?

Comment: how will the turmoil in the finance and energy markets affect buy-to-let landlords?

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The fallout from Kwasi Kwarteng’s mini-budget sent the money markets into blind panic and few short weeks ago, and the knock on effect was felt right than across the buy-to-let mortgage marketplace.

The episode was a short lived panic following the “mini” budget announcement. But now, around a month later, with a new Chancellor and a new Prime Minister, although the money markets are still reeling from the fall out, there are signs the mortgage market is beginning to stabilise.

A world economic problem

Of course, a hike in interest rates was already on the cards before Kwarteng made his appearance, mainly led by the American central bank’s policy of steadily raising interest rates to combat inflation, which is raging at around 10 per cent in most Western countries. The unfortunate consequence of this, the consensus of expert opinion suggests, is that economies will slow down and go into a recession.

The Bank of England Base Rate has been following suit with steady rate rises and more to come, but the mini budget, with it’s promise of big tax cuts and huge unfunded spending commitments, had the effect of sucking the confidence out of the UK money market. The result was a rapid rise in the SWAP rates upon which fixed-rate mortgages and pension funds are pegged.

With the appointment of a new Prime Minister, both his and the Chancellor’s plans for the economy have brought some confidence back into the UK market, which in turn has meant the rise in SWAP rates seen after the mini-budget has been largely reversed. In consequence there’s a good chance we will see fixed-rate mortgages pricing drift lower again.

However, don’t raise your hopes too high, we’re unlikely to see the lows in mortgage rates that we’ve become accustomed to in recent years. As economies continue to battle inflation and a cost of living crisis we won’t see these low rates any time soon. But there are nevertheless some signs that rent-to-interest (RTI) calculations will soften again with a more settled fixed rate mortgage market environment.

Challenging times ahead for landlords

It’s abundantly clear that landlords and property investors are in for a tough ride over the coming months and perhaps years ahead. Not only will they endure volatile money markets – the cost of living explosion will put pressure on tenants’ incomes and therefore rent payments – but there’s an ever-changing political and fiscal backdrop – new legislation is coming along to challenge even the hardiest small-scale landlord.

Yes, the tail end of 2022 will be a challenging. Bbut then opportunities will arise for those enterprising landlords who are ready and prepared to take advantage. There’s a huge shortage of suitable reasonably priced accommodation for tenants in many parts of the country. The demand is there. This will underpin the investment risk for a buy-to-let investment, and should still give a competitive return compared to alternative investments types, when properly managed.

Rents continue to surge

It’s fair to say that most landlords – contrary to popular belief – don’t increase rents during the tenancy term or even over the lifetime of a tenancy in some cases, and some even fail to increase when re-letting, but safe to say average market rents have risen steadily, reflecting the shortage.

New-build numbers are still well below government targets and it will likely take years for build-to-rent developments to fill the void and even out the supply-demand imbalance.

Landlords leaving the sector

With income and regulatory pressures causing some landlords to leave the sector, and the flow of new rentals coming to market well below the long-term trend, there are real signs of a looming housing market crisis facing Government – something this new Government team should take urgent notice of.

The regulatory challenge

Putting aside the challenges posed by the Renters Reform Bill: the banning of section 21 and fixed term tenancies, one of the biggest financial challenges and causes of concern for the future of buy-to-let is the changes being introduced to the Energy Performance Certificate (EPC) requirements, governed by the Minimum Energy Efficiency Standard (MEES) regulations.

This is the set a minimum energy efficiency standards of EPC ratings currently set at “E” for domestic as well as commercial private rented properties in England and Wales. But the government has committed to upgrade as many private rented sector (PRS) homes as possible to Energy Performance Certificate (EPC) Band “C” by 2030, where this is practical, cost-effective and affordable, and this could be introduced sooner rather than later.

Raising the energy performance standard to Energy Performance Certificate (EPC) rating “C” will not be easy in many of those cases of traditional build (solid wall) older properties, and consequently will be expensive.

A revised phased process for achieving these improvements for new tenancies from 2025 and all tenancies from 2028 is the latest indicator the Government has proposed, taking into consideration issues of financing, enforcement, measuring energy performance and exemptions.

The Government’s aims for improving the energy performance of privately rented homes include:

• Cutting bills for low income and vulnerable tenants
• Lower energy bills for tenants in general, providing warmer homes
• Boosting the quality, value and appeal of landlords’ assets
• Providing improved energy national security through lower energy demand on the grid and reduced fuel imports

In support of this the preferred policy scenario would follow these four key principles:

• Raise the energy performance standard from EPC from “E” to “B” and “C”
• Phase-in improvements for new tenancies from 2025, and for all tenancies from 2028
• Increase the maximum investment requirement for landlords from £3,500 to £10,000
• Introduce a tackle ‘fabric first’ approach to energy performance improvements.

These are some obvious practical ways that landlords can improve the energy efficiency of their properties:

– Upgrade loft insulation – perhaps the most effective energy saver, preventing heat loss through the ceiling and roof

– Add cavity wall insulation or where the walls are solid, insulate the walls – perhaps the second most effective way to preserve warmth in the home

– Add double glazing – to reduce heat loss and noise pollution

– Upgrade heating boilers – will improve heating efficiency, create a warm home, reduce condensation and damp and reduce bills

– Upgrade draught proofing – to minimise the loss of heat by preventing warm air escaping and cold air streams coming in the home

– Fit LED lighting – it’s more energy efficient and cuts electricity costs

– Add smart heating controls and meters – aids to energy conservation and monitoring

Energy efficiency and mortgage applications

Mortgage lenders are now much more aware of the importance of energy efficiency ratings to the marketability of rental properties. Mortgage companies are increasingly adding EPC ratings to their lending criteria.

This is because, if they need to re-possess a rental property they want to be in a position to achieve the best possible price when they put the property on the market, or more likely auction it off. Some lenders are now stipulating less favourable mortgage rates for rentals with EPC rating below “C”, and in other cases loans have been refused altogether.

View Full Article: Comment: how will the turmoil in the finance and energy markets affect buy-to-let landlords?

Firms involved in £2.4 million property investment scam are shut down

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A group of companies involved in ‘substantial’ property investment scams has been wound up by the High Court and an official received appointed to liquidate the four firms involved.

These are Sentor Solutions Commercial Ltd, Fabcourt Developments Ltd, Sentor Solutions Advisory Ltd and Sentor Solutions Ltd, all of which are part of the Sentor group.

Sentor Solutions Advisory Ltd and Sentor Solutions Ltd recently changed their names and were trading as Hall Contracting Services Ltd and Clarkson Murphy Partners Ltd respectively.

Investors were lured in by promotional material (pictured) via Fabcourt, which claimed that Sentor Solutions Commercial and Clarkson Murphy Partners were the Security Trustee for the investment scheme, which promised fixed rate 8% return investment products known as ‘convertible loan notes’ with high monthly or quarterly interest rates for a duration of two to three years. Investors were asked for a minimum of £50,000.

Assets

The claims of returns and trustworthiness were false – and an investigation by The Mirror newspaper earlier this year found that many claims about Fabcourt on its website were made up, including fake names and stolen photographs provided as its ‘directors’ along with claims it had assets totalling £140m.

In March last year the Financial Conduct Authority (FCA) warned that Fabcourt ‘may be providing financial services or products in the UK without our authorisation’.

Also, investors were not made aware that Fabcourt was the successor to Sampson Property Developments Ltd, previously known as Texmoore Limited, which had operated the same scam until it entered into compulsory liquidation on 23 March 2022 following a creditors petition.

£2.4 million

The two scams combined attracted some £2.4 million, and in both cases the companies told investors the loan notes involved were ‘government-backed and that the investments were covered by the Financial Services Compensation Scheme, neither of which was true.

The Insolvency Service investigation into the companies established that the Sampson Property Developments and Fabcourt Developments schemes were part of an investment fraud collectively operated by the companies.

And having received funds from would-be investors in the Sampson Property Developments and Fabcourt Developments schemes, the companies made a handful of monthly interest payments to the investors before going silent, leaving many substantially out of pocket.

The properties set out in promotional materials were found to be owned by unrelated entities, and videos promoting the investment schemes had been cloned.

Culpable parties

Edna Okhiria, Chief Investigator at the Insolvency Service, says: It is undeniably in the public interest for these companies to be prevented from continuing to trade, which will enable the Official Receiver to carry out further investigations into the activities of the Companies to establish the extent of its liabilities, the position as regards any assets, the whereabouts and conduct of the directors and any other culpable parties.

“These companies operated a fraudulent scheme whereby they mislead the public, falsely claiming that the Texmoore and Fabcourt investment schemes were regulated to provide the veneer that funds invested were protected when in fact they were not.

“These claims induced investors to invest substantial sums. The companies then failed to make more than a few monthly interest payments, leaving investors substantially out of pocket.

“The Insolvency Service, alongside our partner agencies, continues to investigate schemes such as these and to pursue enforcement against those responsible for facilitating them.”

View Full Article: Firms involved in £2.4 million property investment scam are shut down

LATEST: New Housing Minister is a landlord as Gove clears out Truss appointees

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Landlords might have found themselves an ally in the newest minister at the Department for Levelling Up, Housing and Communities.

Lucy Frazer – the latest MP to join returning boss Michael Gove – is a landlord who rents out a property in London and also defended the government’s decision to stand down eviction protections for residential tenants after the pandemic.

She told BBC Question Time in 2021 that tenants had been “protected for a long period of time”, adding “it is important that landlords can take control where necessary”.

A fan of Rishi Sunak, Frazer publicly backed the new prime minister, tweeting this week: “I am confident that our principled and tremendously capable PM will lead us effectively through these economically challenging times.”#

Brief spell

The Conservative MP for South-East Cambridgeshire since 2015, she had a brief spell as transport minister during Liz Truss’s premiership and was previously treasury minister and a minister in the Ministry of Justice. She has also been solicitor general and before becoming an MP was a practising barrister.

Although Frazer’s specific responsibility has yet to be announced, she will join other senior colleagues in the department: Dehenna Davison, minister for levelling up, Baroness Scott of Bybrook, minister for communities, and Lee Rowley, who last month was announced as the MP replacing Eddie Hughes, taking up the housing brief.

Only this morning, former ministers Paul Scully and Andrew Stephenson were quietly removed from the department’s website.

View Full Article: LATEST: New Housing Minister is a landlord as Gove clears out Truss appointees

Landlord fined £22,000 over ‘squalid’ block of flats in London

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The landlord of a block of flats which left leaseholders and tenants living in squalid and unsafe conditions for years has been fined £22,000.

Islington-based Proposed Company Limited failed to fix problems including a leaking roof, damp, mould, and a pigeon infestation – some of which had been reported more than a decade ago. Barkingside Magistrates Court heard that it had also ignored multiple abatement notices from Barking and Dagenham Council.

Housing officers received complaints from residents in shops on the ground floor and maisonette flats on the first and second floor in Whalebone Lane South, Dagenham (pictured).

Pigeon problems

They issued two abatement notices – one for a pigeon infestation in the roof and the other for the leaking roof – however Proposed Company, which bought the building in 1993, ignored the notices and failed to carry out any maintenance. Along with the £22,000 fine, it was also ordered to pay £150 costs and a £190 victim surcharge.

Councillor Syed Ghani (pictured), cabinet member for enforcement and community safety, says: “The building owners showed a flagrant disregard not just for the law, but also for the health and safety of the people forced to live in squalid and unsafe conditions caused by their greed.”

He adds: “We hope this sends a strong message to anyone who hopes to prioritise profit over people that we will take action when necessary.”

View Full Article: Landlord fined £22,000 over ‘squalid’ block of flats in London