‘Don’t panic’ as BTL mortgage rates rise, urges financial expert

admin    Uncategorized     agents

A mortgage expert has urged landlords not to panic as buy-to-let mortgage rates continue to rise.

Dan Lee (pictured) of Total Landlord Mortgages says he’s seen increasing number of landlords getting cold feet about taking on new debt as interest rates rise across the mortgage board.

His comments follow research by Less Tax For Landlords, which showed that a privately-owned portfolio with £2m worth of mortgages secured against it charging a two per cent rate of interest, earning a gross rental yield of £240,000 annually with £48,000 of tax deductible expenses would produce a net profit of £92,344 based on 2021/22 tax year rules.

If the same portfolio remortgaged onto a rate of 3.75 per cent, net profit would almost halve to £50,344, it claims.

“Obviously there’s a lot of doom and gloom out there right now and everyone is stressing about rising interest rates”, says Lee.

Two decades

“But my two decades or more of experience in the mortgage teaches me that rates are not high – they are just returning to a realistic level.”

Lee says that landlords have become used to paying the rock bottom interest rates that were introduced following the financial crash of 2008 and kept low ever since artificially by the Bank of England, including after Covid.

“I have been reassured that the bank would never allow mortgage interest rates to reach eight or nine percent that they hit during the late 1980s and early 1990s,” says Lee.

“And remember that buy-to-let rates hit nearly 7.5% for a 75% LTV mortgage in 2008/9 before the global financial crash.

“While the government would never step in if there were a stock market crash, they would if mortgage interest rates began to rise significantly, because we’re all so much more in debt than we use to be.

“So I think mortgage rates for BTL will peak at about four or five percent.”

Lee says talk of a property crash is also misleading – because the ‘unnatural growth’ in the market created by cheap mortgages, alongside huge competition for limited stock, pushed up prices by 20% in some areas, and that a correction is bound to happen.

Read more about landlord mortgages.

View Full Article: ‘Don’t panic’ as BTL mortgage rates rise, urges financial expert

Cladding repairs needed to remortgage?

admin    Uncategorized     agents

Has any leaseholder, coming to the end of their mortgage term, been able to re-mortgage with a B2 defective fire risk assessment applied to their building?

Further, the landlord is still holding out ‘waiting’ for Government clarification as to who will pick up the bill on a building over 11m tall

View Full Article: Cladding repairs needed to remortgage?

Rogue landlady faces jail over long-running campaign of violence against tenants

admin    Uncategorized     agents

A rogue landlady has been convicted of illegally evicting tenants during a decade-long campaign of violence, theft and vandalism.

Sohila Tamiz, of Flint Lane, Lenham, even helped organise a gang of 10 to douse one man in petrol and smash his teeth, the trial at Canterbury Crown Court heard.

Tenants at flats in Athelstan Road, Margate, saw locks changed, toilets broken, flooring removed, electricity sabotaged and masked men ordering them to leave between 2011 and 2021.

Some were forced to go without heating and evicted after falsely having drugs pinned on them.

In what Thanet Council believes is the largest prosecution of its kind for eviction offences, Tamiz was found guilty on five counts of conspiring to unlawfully evict a tenant, eight counts of conspiring to, or interfering with, the peace or comfort of a residential occupier, and one count of conspiring to burgle.

Unlawful eviction

Her son Pedram Tamiz was found guilty of two counts of conspiring to unlawfully evict a tenant, and five counts of conspiring to, or interfering with, the peace or comfort of a residential occupier.

Enforcer Adam McChesney, of Gloucester Avenue, Margate, was found guilty of two counts of conspiring to unlawfully evict a tenant, and three counts of conspiring to interfere with the peace or comfort of a residential occupier.

Agent Kasem El Darrat, of Athelstan Road, Margate, was found guilty of one count of conspiring to unlawfully evict a tenant, and one count of conspiring to interfere with the peace or comfort of a residential occupier.

Read more: How to handle the evictions process.

Councillor Jill Bayford, cabinet member for housing, says: “We hope that this outcome sends out the serious message to other landlords in the district and further afield that criminal activity, or any intimidatory or threatening behaviour towards tenants, will not be tolerated, but will instead be routinely prosecuted.”

The council is now gathering victim statements ahead of sentencing, which is due to take place on 10^th October.

Read more about Margate.

View Full Article: Rogue landlady faces jail over long-running campaign of violence against tenants

Landlords face ‘scandalous situation’ as housing payment problems continue – expert

admin    Uncategorized     agents

A Universal Credit expert has warned that the “scandalous situation” of landlords trying to access housing payments is getting worse.

Bill Irvine at UC Advice & Advocacy claims the DWP is simply making up rules as it goes along, often explaining that it can’t speak to landlords directly when dealing with cases where tenants have refused consent for payments to be redirected.

“These rules are designed to frustrate and impede landlords looking to get their rightful entitlement,” he tells LandlordZONE.

“They’re basing the line they give about not sharing information on one meeting where a private organisation warned it would evict a tenant if it found out they were receiving benefits – which is illegal.

“The DWP now just repeat that and are misinforming landlords. They can share this information but are choosing not to.”

Deny redirection

Irvine is currently dealing with a case where a tenant accrued £9,000 in rent arrears and the landlord has applied many times to have the housing costs redirected. He discovered that the tenant has twice exercised her ‘option’ – supposedly based on UC regulations – to deny redirection.

“No such option is available, certainly not in the regulation that created the Alternative Payment Arrangement scheme,” he asserts.

Although the DWP often takes the tenant’s side, says Irvine, he has also been involved in a case where one tenant’s payments – a former refugee – were suspended despite the fact he’d provided exhaustive amounts of ID.

‘Confidentiality’

Irvine raised his case directly with DWP’s director general’s office, explaining that the tenant’s landlord was willing to rehouse him immediately. At first, the DWP would not share any information because of GDPR and ‘confidentiality’ reasons but finally restored the Universal Credit and wiped out 95% of the rent owed, which resulted in the tenant being offered a new tenancy.

Irvine adds: “I hope the courts will start challenging the DWP during eviction cases and apply more pressure but until that happens this situation will only get worse.”

LandlordZONE has contacted DWP for comment.

Read more stories about APAs.

View Full Article: Landlords face ‘scandalous situation’ as housing payment problems continue – expert

Build-to-rent giant takes a side-swipe at landlords as it trumpets benefits

admin    Uncategorized     agents

Build-to-rent developer Grainger has taken a dig at private landlords by extolling the virtues of the purpose-built sector.

Naming decorating restrictions and restrictive tenancies as some of the common myths around rental properties – obliquely referring to the perceived drawbacks of the traditional PRS – resident services manager James Bell says contrary to popular belief, those in a rental property aren’t completely limited when it comes to decorating or doing DIY.

“Some build-to-rent operators go one step further and in many properties allow residents to paint the walls within their apartment, providing they have signed up for a reasonable length of tenancy and that the space is returned to its original condition before vacating the property,” he explains.

Unbreakable

Bell says another common myth is that renting involves lengthy unbreakable contracts that can incur charges when a contract or lease is prematurely ended by a tenant.

“Many build-to-rent developments offer flexible solutions for residents, such as ‘stay as long as you want’ tenancy options in the case of Grainger,” he adds.

“This flexibility offers residents peace of mind, as well as the opportunity to relocate, downsize or upsize at far greater ease.”

Although all landlords will soon have to accept reasonable requests for pets as part of the new renting reforms, he says Grainger already has multiple pet-friendly properties which allow residents to live with their furry friends at home.

“Some developments even offer residents doggy bowls, water, and treats for dogs,” adds Bell.

Read more about BTR.

View Full Article: Build-to-rent giant takes a side-swipe at landlords as it trumpets benefits

40% of privately rented homes won’t make 2028 deadline – agents claim

admin    Uncategorized     agents

Forty per cent of privately rented homes in England are unlikely to achieve the energy efficiency rating target that is due to come into force in 2028.

Trade organisation Propertymark says its analysis of the latest English Housing Survey shows that 60 per cent of the rental sector will have achieved the minimum EPC C rating by that year, leaving the rest technically unable to be rented out.

The draft strategy includes a ‘preferred policy scenario’ for new tenancies to have a valid EPC rating of ‘C’ or above by 2025, extending to all tenancies by 2028.

But Propertymark is calling for the UK Government to move away from a one-size-fits-all policy in favour of energy efficiency proposals that consider a property’s age, condition, and size rather than its tenure.

Its Lagging Behind report highlights the variances in retrofitting costs based on individual characteristics and regional property values.

It includes proposals for local councils to develop ‘one stop shops’ to engage with landlords to find suitable methods to facilitate retrofit at pace which has also been recommended by stakeholders such as the Local Government Association.

Incentive?

“We knew it would be a huge challenge for the PRS to achieve the proposed 2028 target because the owners of rental properties will not directly benefit from lower energy bills, so where is their incentive?” says Timothy Douglas, (pictured) Head of Policy and Campaigns for Propertymark.

“The data in the English Housing Survey shows just how far there is to go.

“Our member agents are already seeing rental properties disappearing from the market for a variety of reasons and there is a real danger more could go with the EPC rating target hanging over them.”

Read more: Ultiamte guide to MEES and the EPC system.

View Full Article: 40% of privately rented homes won’t make 2028 deadline – agents claim

LATEST: Councils mount ‘flurry’ of new initiatives to regulate HMOs

admin    Uncategorized     agents

Councils around the country are launching a flurry of HMO rules and proposals – in York, North Northamptonshire and Hounslow.

York Council hopes to introduce additional HMO licensing in eight of the city’s wards: Hull Road, Guildhall, Fishergate, Clifton, Heworth, Micklegate, Osbaldwick and Derwent, Fulford and Heslington.

This would increase the number of properties needing a licence from about 1,000 to 3,000, in a scheme scheduled to start in April 2023.

The council aims to improve health and safety standards and HMO management after a consultation shaped new recommendations in a report which will go to the council’s executive on 28th July.

In North Northamptonshire, residents are being asked to take part in a two-month public consultation to explain how they’ve been affected by HMOs.

They can even pinpoint specific properties where they have had issues. It follows a council plan to scrutinise the level of HMOs in six key areas: Kingswood and Hazel Leys, Corby West, Clover Hill and Northall in Kettering, Finedon, and Croyland and Swanspool in Wellingborough.

The council says it wants to work with landlords, tenants and other stakeholders to use “the whole suite of regulation and planning requirements”, which could include an Article 4 direction.

Read more: Ultimate guide to HMOs.

Meanwhile, Hounslow Council has introduced an Article 4 direction for landlords wanting planning permission to covert family homes into HMOs. It says the new measure – which takes effect in a year’s time – aims to address increasing concerns among residents about the negative impact of HMOs in their local communities, which have been blighted by an increased level of anti-social behaviour, fly-tipping and noise.

Councillor Tom Bruce (pictured), cabinet member for regeneration and development, says: “It’s clear that many HMOs are having a detrimental impact on the local community and this new measure will ensure thorough oversight – protecting both the tenants in HMOs and the communities that surround them.”

A consultation runs until 9th September.

Read more about York landlords.

View Full Article: LATEST: Councils mount ‘flurry’ of new initiatives to regulate HMOs

Have your say on the Renters Reform White Paper

admin    Uncategorized     agents

The Levelling Up, Housing and Communities select committee is launching a probe into the Renters Reform White Paper and is asking for evidence to answer a list of questions they consider unanswered. The closing date for submissions is 19 August 2022.

View Full Article: Have your say on the Renters Reform White Paper

Keep yourself up to date at the next Virtual National pin Meeting

admin    Uncategorized     agents

It is so important at the moment to keep up to date with the Property Market. On Wednesday 3rd August at 6 pm, the property investors network will be running their Virtual August National pin Meeting.

There are three amazing speakers

View Full Article: Keep yourself up to date at the next Virtual National pin Meeting

Cost of EPC improvements exceed landlord pain thresholds

admin    Uncategorized     agents

There is a gulf between the amount that landlords are willing to pay to meet proposed new EPC requirements and what it is actually likely to cost.

A survey of landlords carried out on behalf of Paragon Bank has found that 77% of landlords are willing to spend up to £3,000 to upgrade each property they own to EPC C in order to meet new regulations proposed by the Government

View Full Article: Cost of EPC improvements exceed landlord pain thresholds