CLADDING: Charging smaller landlords for remediation is ‘wrong’, MPs tell government

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A cross-party group of MPs has demanded that the government look again at excluding scores of landlords from accessing cladding remediation funds.

The Levelling Up, Housing and Communities (LUHC) Committee disagrees with the government that only buy-to-let landlords with one other property should be included in statutory protections for leaseholders, arguing that there are other options to exclude wealthy property tycoons without making smaller landlords liable.

Its Building Safety: Remediation and Funding report warns that too many leaseholders will fall through the cracks of the government’s “piecemeal measures” to protect them from the costs of building safety remediation.

It wants the proposed cap on non-cladding costs for leaseholders scrapped, as well as a comprehensive building safety fund to cover the costs of remediating all building safety defects on any buildings of any height where the original ‘polluter’ cannot be traced.

Committee chair Clive Betts (pictured) says the government needs to stop pitting the building safety crisis against the housing crisis.

“Leaseholders should not be paying a penny to rectify faults not of their doing in order to make their homes safe,” he says.

“We recommend the government identify all relevant parties who played a role in this crisis…and legally require them to pay towards fixing individual faults and ensure that they also contribute to collective funding for building safety remediation.”

Timothy Douglas (pictured), head of policy and campaigns for Propertymark, says the government now needs to reject the assumption that all landlords are ‘wealthy tycoons’.

He adds: “Our member letting agents who work closely with landlords are clear in their message to us that many are extremely concerned about the huge financial hardship they are facing.

“The Secretary of State has repeatedly said that those who are not responsible for this crisis should not have to pay, so we urge him to act on that principle and take away the uncertainty by accepting the recommendations in the committee’s report without delay.”

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Developer to build £1 billion ‘built for renters’ portfolio in London commuter towns

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London commuter towns are being targeted by property developer Strawberry Star Group to establish its new £1 billion build-to-rent (BTR) empire.

It has announced plans for a 163-apartment block in Harlow (pictured) due to start construction this year under its Star Living brand.

The firm also has planning permission for a 100-unit site in Gravesend, while an existing block in Luton – where 65% of the current 135 rental units were rented within the last three months of completion – will soon release 564 more. 

Strawberry Star Group aims to have a £1 billion portfolio within London commuter towns by 2027 in areas close to transport hubs that have very few new-build rentals on offer, with a high proportion of young professionals, says chairman Santhosh Gowda (pictured).

“More choice and better supply will be a huge advantage to those now spending increasing time at home with flexible working here to stay, as BTR products are in a much better position to meet future needs and live-work trends,” he explains.

Renting journey

The Star Living site in Harlow will manage each renter’s journey from reservations to end of tenancy. Its studios, and one and two-bedroom apartments have Wi-Fi and furniture included and offer digital concierge, maintenance, parcel storage, flexible co-working, shared roof terrace, dry cleaning and housekeeping. Pets are also welcome. 

Read more: Housing hotspots in 2022 – Where should you invest?

Gowda adds that 2022 is the year of BTR. “Last year saw a near 80% increase of capital invested into the sector compared to 2020, so it’s not unreasonable to suggest investment could triple as we edge towards 2023, having shown incredibly strong resilience during an unpredictable year for the UK economy.”

Investors ploughed £4.1 billion into build-to-rent last year, betting that purpose-built flats would provide more reliable returns than other sectors, according to global real estate advisor CBRE.

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Are Buy to Let nightmares keeping you awake at night?

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A recent study reported in The Daily Mail has found that stress is affecting 1/3 of landlords’ health and wellbeing.

From finding, it is more and more difficult to generate a profitable rental income, to worrying whether the abolition of S21 will make it difficult to sell their properties and access the equity many have planned for their retirement to the new threats resulting from Russia’s invasion of Ukraine

View Full Article: Are Buy to Let nightmares keeping you awake at night?

Inflation Attitudes Survey

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This news release describes the results of the Bank of England’s latest quarterly survey of public attitudes to inflation.

From February 2022, the survey has been conducted on the Bank of England’s behalf by Ipsos, prior to that it was conducted by Kantar.

View Full Article: Inflation Attitudes Survey

Colliers International expects healthy UK commercial property returns in 2022

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Retail property has been trailing, but the industrial sector will continue to help underpin returns as warehouses, prime offices and life science/pharma assets remain in demand.

The American owned international property agents, Colliers International, predict that all UK market sectors will show positive total returns growth in 2022, with the leading sector industrial property in the vanguard at 13.2%.

Overall, yields are well below the 16.5% total rental growth seen in the six-year high figure in 2021, but yields will stabilise and values will recover following a very difficult period.

Douglas McPhail, head of Colliers in Scotland, has said:

“We continue to see considerable investor demand for offices in Scotland, especially in Edinburgh where we have witnessed strong prices being paid.

“Looking across the commercial property spectrum, pricing remains firm with yield compression expected across most market sectors this year.

“We are also expecting investment volumes to break through the £2 billion mark in 2022 as appetite remains strong and there are still opportunities for strong returns.”

Investment in Scotland encouraging

The firm reports retail investment sales in Scotland hitting a three-year high of £530 million in 2021, helped by a strong final quarter which saw £210m transacted.

Tourism volumes are expected to return slowly as Covid recedes, with an expected return to near normal levels by the summer, which should help support high street shopping.

However, following price hikes due to rising inflation and the war sanctions these will have a real impact in real household incomes. The result will be declining consumer confidence which will inevitably continue to put pressure on retailers. Colliers is expecting yet more rent reductions across most UK retail centres over the next two years, with as return to growth in 2024.

Despite the significant rental declines through the pandemic period, Colliers predicts that the pricing correction is coming to an end. Mr McPhail says that, “All retail yields in Scotland hardened in 2021 and at the end of the year were at 6.98%, down by just 0.84% since the end of 2020.”

Retail warehouses are expected to perform particularly well, with Scottish office buildings holding their own at just 5% below the 10 year average of £680m. Investor demand for prime assets remains strong which will result in steady asset price rises expected this year.

Glasgow, Edinburgh and Aberdeen have all seen record take-up levels of leases, with a potential resurgence in the oil business making Aberdeen one of the front runners for North Sea oil companies. Shell recently took 71,000 sq ft at the Silver Fin Building earlier in 2021.

Colliers figures show that around £340m accounts for transactions completed in the industrial sector in 2021. This is a big increase from the £220m transactions in 2020, and almost 50% above the 10-year average of £230m.

Elliot Cassels, in the National Capital Markets team at Colliers Scotland, had said:

“The rise in e-commerce and the effects of COVID-19 has accelerated the structural change in demand for warehousing. The increased tenant demand and strong rental growth has resulted in industrial and distribution remaining the best performing sector in the Scottish property market and the rest of the UK attracting strong investor demand from both domestic and overseas capital. However, the Scottish market has limited prime stock and subsequently the market has been starved of product.”

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What to do with equity release funds?

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Hi guys, I’m in a position to release a total of £680,000 equity on two properties (my home and a buy to let). I’m not sure whether to use this to expand the property portfolio, or use this to clear the mortgage on my main residential home and invest the remainder?

View Full Article: What to do with equity release funds?

Government is wrong to exclude Buy to Let Landlords

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A cross-party group of MPs has opposed the Government’s plans to make many buy-to-let landlords pay for the replacement of dangerous cladding.

Ministers have proposed that landlords renting out more than one leasehold property will be excluded from its commitment that no leaseholder should have to pay for the removal of unsafe cladding following the Grenfell tragedy.

View Full Article: Government is wrong to exclude Buy to Let Landlords

Mandatory to register non-taxable trusts with HMRC’s Trust Registration Service?

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If you hold a property as a nominee on behalf of another person or company, it may be mandatory to register this trust with HMRC’s Trust Registration Service (TRS) by 1 Sept 2022. Previously, non-taxable ‘bare trusts’ did not need to be registered.

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NEW: London prepares legion of housing officers to tackle rogue landlords

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A legion of housing enforcement officers is being trained up to bolster London’s fight against rogue landlords, with plans to roll out the scheme across the UK.

The first cohort is studying at Middlesex University for a new level five, 12-month housing enforcement qualification – Private Sector Housing Interventions – which takes people with little or no housing experience in environmental health or PRS housing and equips them to carry out the duties of a PRS enforcement officer.

The course has been set up jointly by the Chartered Institute of Environmental Health (CIEH) and Mayor of London Sadiq Khan to address the lack of qualified and experienced staff following years of cuts in local authorities.

Landlords regularly voice their frustration when this translates into councils struggling to police licensing schemes.

Khan is funding the programme, which is only open to London councils, but if successful, could be rolled out nationally.

Mediate disputes

He wants to see tougher penalties for rogue operators and says: “This new qualification will give councils across London the workforce and expertise to mediate disputes, enforce standards and crackdown= on the rogues who give the many honest operators in the sector a bad name.”

Dr Alan Page (pictured), associate professor of environmental and public health at Middlesex University, adds: “These students will add really able practitioners to London enforcement teams and thereby increase capacity to improve the sector and the life circumstances of tenants.”

CIEH has been trying to generate more interest in the environmental health profession through social media campaigns and has also called on Chancellor Rishi Sunak to create a national apprenticeships fund for local authorities, to help them fund the cost of training more environmental health practitioners.

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Landlords fight criticism and highlight huge costs of evicting lawless tenants

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A large regional landlord association has launched a campaign to highlight the expensive problems many buy-to-let investors face when tenants go rogue.

The Eastern Landlord Association says it wants to tell the other side of the story after the region’s newspaper revealed that some 10,000 complaints have been made by private tenants to Suffolk council about their property or landlord over the past five years.

Chairman John Pitts has hit back telling The East Anglian Times that instead of being blamed for poor standards, private landlords should be incentivised to provide housing stock, given the shortage of affordable council homes.

Commenting on recent research by trade body Propertymark which found that 20% of landlords are considering selling all or part of their portfolios during 2022, Pitts said if such predictions were true then it would ‘catastrophic’ for tenants.

Rogue tenants

The association has also highlighted several landlords in the region who between them have lost tens of thousands of pounds in repairs and court costs after rogue tenants damaged their properties or stopped paying the rent.

This includes Terry Baccus, a landlord with three properties in the region who, after tenants trashed a terraced house of his in Lowestoft, says existing eviction rules do not give small landlords like him enough protection from rogue renters.

He found that the tenants, who deliberately flooded the kitchen of the property once it became clear they would be evicted, had been paid their Universal Credit rent direct via the DWP but had not passed it on for nearly two years, despite being given a rent reduction by Baccus to help them manage their bills. The property is now on the market after Baccus vowed that ‘enough is enough’.

Picture credit: Terry Baccus.

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