Landlords: Get ready for torrential downpours and strong winds

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We may have avoided the April showers this year, but May is more than making up for it. Many parts of the UK have already seen in excess of double their normal rainfall for the whole month as torrential rain has swept across the country. In the short term at least, the weather is stuck in an unsettled, turbulent pattern.

With more drenching downpours and thunderstorms forecast this week, the Government has issued a number of flood alerts and the Met Office has weather warnings in force for strong winds in the south and south west of England on Thursday and Friday.  

Steve Barnes (pictured), Associate Director at Hamilton Fraser Total Landlord Insurance, is urging landlords to be prepared:

“During periods of unsettled weather like we are experiencing at the moment, with water levels already very high and more rainfall forecast, as well as strong winds, preparation is everything. If you take the right preventative measures and have comprehensive landlord insurance in place, you can be confident that you’re doing all you can to protect your tenants and your business. It’s also really important to communicate with your tenants.

Ask them to alert you to any repairs that might put your property at greater risk of damage, and make sure they know what to do if your property is affected by flooding or storm damage. Landlords with high-risk properties should prioritise investing in home improvements as well as increasing their insurance protection.”  

Prepare for flooding by planning ahead

With river levels having risen in parts of the UK, such as on the River Wey, as a result of sustained heavy rainfall, flash floods are possible in certain areas. According to the most recent CCRA report, an estimated 1.8 million people are living in areas of the UK that are at significant risk of coastal, surface or river flooding. 

But it’s important to realise that it’s not just properties in riverside or coastal areas that are susceptible to flooding.

Severe flooding can happen without warning as heavy rain, particularly on already saturated ground, can lead to rising groundwater causing burst water mains and backed-up sewers, resulting in surface water that could have a devastating impact almost anywhere, making properties completely uninhabitable and leading to serious repercussions for landlords and tenants.

Last year the Environment Agency launched a campaign to highlight the impact of flood damage on mental health, advising people of the importance of signing up to flood alerts. Low income households are amongst the most at risk of flooding and 61% of low-income renters don’t have home contents insurance.

It’s important as a landlord that you do all you can to protect both your property and your tenants, by taking the following steps:

Although floods can happen anywhere, it’s worth finding out if you’re at high risk. This should be your first step. Enter your postcode to find out if you’re in an area at risk from flooding

• Forewarned is forearmed – make sure you sign up for flood warnings. These will warn you of the risk of flooding from rivers, the sea and groundwater. You’ll be alerted by phone, email or text when flooding is expected

• Prepare your tenants – provide all tenants in at-risk areas with a decent supply of sandbags and make sure tenants always inform you if repairs are needed so that you can minimise the risk of damage in severe weather. In the event of a flood, make sure your tenants know what to do – for example, how to turn off the gas, electricity and water

• If your property is in a high risk area, it is worth taking extra precautions to minimise flood damage:
• Raising the height of electrical sockets on the ground floor and raising electrical goods above the floor on high shelves or wall mounts 
• Replacing wooden window frames with more durable UPVC
• Waterproofing the doors and skirting boards, as when wood gets wet it can rot
• Fitting waterproof ceramic or stone flooring rather than wooden boards and carpets
• Sealing around external doors and windows

• Check your insurance – make sure your landlord buildings and contents insurance includes flood damage and make sure your tenant knows that it’s their responsibility to protect their belongings with their own contents insurance

Find out more in Hamilton Fraser Total Landlord Insurance’s comprehensive guide, Measures that must be taken to prevent flooding in your properties.

Prepare for strong winds

With strong winds forecast in some areas as well as more heavy rain, landlords should also be making sure their properties are protected from storms. The most common hazards associated with storms are roof tiles cracking, trees falling, flooding and fences collapsing. Over the past five years, 71% of Hamilton Fraser Total Landlord Insurance’s storm claims have been for roof damage, with an average claim of £1,154, typically as a result of high winds causing tiles to fall off the roof.

If you’re unable to access your property yourself, you should contact your tenant to check that everything is in order and secure. Here are some tips to help you prepare your property to limit the impact:

• Check loose roof tiles and guttering
• Secure loose objects such as ladders, garden furniture, plant pots, children’s toys or anything else that could be blown into windows or cause other damage in high winds

• Store lawnmowers and other electrical garden items away to prevent them from getting damaged
• Reinforce windows if a very severe storm is predicted – plywood is a cost-effective way to do this
• Make sure tenants close and securely fasten all windows and doors

You can find out more in Hamilton Fraser Total Landlord Insurance’s guide, Protecting your rental property from storms.

With this unsettled weather set to continue over the next few days, landlords should make sure they keep an eye on the weather so that they can assess their level of risk and be sure to check in with their tenants. Taking emergency preventative measures will reduce the risk of damage to your property, as well as helping protect your tenants and passers-by, for example in the event of a roof tile coming loose, falling off your property and causing damage or injury.

As a valued LandlordZONE reader you’re entitled to 20% off Hamilton Fraser Total Landlord Insurance’s policies, call the team today on 0800 63 43 880 quoting code LZ2021 or get a quote online in under 4 minutes. 

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I want to help my wonderful tenant moving to Exeter

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Hi, my tenant is currently in N. Wales, single educated lady with 2 dachshunds and working as a teacher. She is moving to the Exeter/Devon area after 16 June and cannot find a property.

She has been a wonderful tenant for 3 years with no issues

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Landlord fined over unlicenced ‘hot-bed’ HMO used by 20 Romanian shift workers

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A rogue landlord has been fined for allowing 20 people to live in her unlicensed HMO.

Siddika Begum, of Hawthorn Close in Salisbury, admitted the offence, as well as falsifying information and failing to provide gas, electrical and fire safety certificates for the property – also in Hawthorn Close.

Swindon Magistrates Court heard that the three-storey house in a residential road was continually occupied from March 2019 to September 2020 by up to 20 Romanian adults and their children, many of whom were local shift workers using it to ‘hot-bed’. 

Wiltshire Council reported that the property was overcrowded and unregulated. Not only did it pose a potential health and safety risk to the occupants, but the neighbours were also impacted by significant levels of anti-social behaviour, large amounts of domestic waste causing rats, together with fly tipping and various motor offences including a large number of unpaid parking fines. 

During the investigation, Begum denied that the property was being used as an HMO and claimed she lived there with a couple of friends, despite evidence to the contrary. She was fined £3,104 and ordered to pay costs of £1,224, plus a victim surcharge.

Councillor Phil Alford, cabinet member for housing says: “The evidence required to take this case to prosecution couldn’t have been achieved without the assistance of many different agencies, including Wiltshire Police and was particularly challenging given the Coronavirus situation at the time.”

Read more news about HMO licensing.

Read more about licensing HMOs.

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EICRs From Hell?

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I have a rented property with no problems from the electrics over a 10-year period. I had an EICR carried out in December 2011 that was satisfactory. A week ago the electrician EICR checked the house and found some minor problems with the earths plus the need for a new consumer unit and left.

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DWP will conduct checks to verify or withdraw post Covid UC claims

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People who applied for Universal Credit as Covid hit could be subject to a benefits check by the Department for Work and Pensions (DWP). Citizens Advice sets out the need-to-knows on the DWP’s Trust and Protect scheme, and the steps that should be taken to ensure benefits are not withdrawn.

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Labour launches all-out assault on government’s private rented sector policies

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New shadow housing minister Lucy Powell has taken aim at the government’s failure to protect renters, leaseholders, first-time buyers and local communities, in her maiden speech in the role.

During a debate on affordable and safe housing, she told the Commons that its housing policies had failed.

“Now, more people are living in expensive poor-quality rented housing, subsidised by a soaring housing benefit bill,” said Powell.

The recent Queen’s Speech had done nothing for renters living in, “overpriced, poor-quality homes, thousands of whom are on the brink of eviction”, she said, while it had also neglected to include measures for those stuck on council waiting lists because right-to-buy properties were not being replaced, nor had it done anything to address the climate emergency after its flagship Green Homes grant was dropped.

Added Powell: “Ministers have taken some welcome action, such as the moratorium on evictions, but alongside housing charities, I am deeply concerned that the rolling back of those protections will now lead to a wave of homelessness.”

During the debate, fellow Labour senior Rebecca Long-Bailey (pictured) said that although the government had reaffirmed commitments to end section 21 no fault evictions, this had taken more than two years.

She added: “If the government honour their promise, that still leaves a glaring lack of protection for all those tenants in pandemic arrears who can still legitimately be evicted.

“The government should have set out a package of support for them.”

Powell also introduced an amendment pointing out that the Queen’s Speech failed to prevent the potentially ruinous costs of remediation works to make buildings safe being passed on to leaseholders and tenants and called on the government to set a deadline of June 2022 to make all homes safe. The amendment was rejected, 358 votes to 223.

Read: Who is Lucy Powell?

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Management company director from hell?

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I’ve been a joint shareholder of a freehold company that owns a Victorian block with 4 flats for about 5 years, there are four flats with four shareholders, and I am one of three Directors running the management company.

The other two Directors are ‘Directors from Hell’

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COVID: Fraudulent tenant applications jump as renters dodge referencing

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Growing numbers of amateur scammers led to a 263% rise in the value of fraudulent tenant applications during the past three months, reports due diligence and guarantee firm Homeppl.

It says that if left unchecked, this severely impacts landlords and estate agents leading to potential long-term periods of rent or property damage.

Its fraud detection tests identified that 2% of all tenant applications were fraudulent in the first quarter, with the value of these applications three and a half times higher than Q4 last year.

One in 50 of all tenant applications handled by Homeppl was fraudulent and, in parts of London where properties fell into the high value bracket, this rose to one in 20 of all applications.

In these locations, it often uncovers professional fraud, when the tenant tries to take possession of a high value property and sublet it through short-let sites such as Airbnb to maximise income while defaulting on the rent to the landlord.

CEO and founder Alexander Siedes (pictured) says common techniques used by amateur fraudsters are fake IDs – including passports and driving licences – and doctored documentation including payslips, bank statements, letters of employment, proof of address and proof of study, as well as fake email and websites to mimic employers and references.

He says: “Amateur fraud occurs when tenants aren’t earning enough to afford the property and this type of activity seems to have risen as a result of the pandemic which could be due to tenants being on furlough or losing their jobs.”  

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LATEST: HMO landlord loses Tribunal appeal but wins £6.5k fine reduction

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A rogue landlord has had his appeal thrown out after a first-tier tribunal ruled he had failed to protect tenants’ deposits and welfare at his unlicensed HMO.

Lambeth Council brought the prosecution against Fernando Brown – known as Fred – of Holmewood Road, South Norwood, who was fined £18,500 for housing eight tenants in the six-bedroom property in Herne Hill.

The council’s environmental health team was alerted by a tenant after bailiffs turned up to demand council tax arrears from Brown’s son Andrew.

The tenants confirmed their landlord collected rent money in person and always in cash. Investigations revealed Brown often failed to provide rent receipts, had no written tenancy agreement with any of the occupants and did not protect their deposits.

Ignored

During the inspection, several defects including a lack of fire precautions were spotted and an improvement notice was served. A follow-up inspection found the eight tenants were still living at the property and the previous notice had been ignored.

The council issued a proposed fine of £24,999 as it said Brown had been motivated by financial gain by not paying £1,674 for a five-year HMO licence and failing to comply with the authority for almost a year.

During the tribunal, Brown claimed he had signed a tenancy agreement with three people in 2015 and thought they still lived at the property.

He claimed to have been misled and applied for possession of the property when he found out there were eight tenants. The tribunal upheld the original decision but reduced the financial penalty to £18,500.

Councillor Maria Kay (pictured), cabinet member for housing and homelessness, says: “Unscrupulous landlords who put profit ahead of their tenants’ safety and wellbeing will not be tolerated in our borough. I am pleased that the tribunal recognised the gravity of the breach Mr Brown committed and agreed his actions were serious enough to warrant a substantial penalty.”

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FOCUS: Business rates now the biggest retail property cost over rents

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With falling rent values, business rates are now the biggest cost for many high street retailers, says Tom Entwisle.

With the long-term decline of the High Street, and now Covid, retail property values have seen a rapid decline. In some locations, rents have halved.

British Property federation (BPF) CEO Melanie Leech says that retail rents outside London had fallen by about 30% over the previous decade, even before the pandemic started. “Including inflation, it’s more like 50%.”

And commercial property agents are estimating that rents have fallen by up to another 50% since the start of the pandemic, depending on the type of retailer and location. This leaves business rates in some cases as much as 150% on top of the rent payable for tenants in some shopping centres.

The retail properties and office property sectors are expected to see major declines in rent values this year due to the Covid-19 pandemic.

More falls

According to Moody’s Analytics’ forecasts for commercial real estate average rents and vacancies, the average rents of retail properties are expected to fall again this year with wide-spread store closures and the rising threat to the sector posed by Internet sales and home delivery shopping.  

The office market is not far behind, experiencing downward pressure on the usage intensity of office space even before the pandemic, but now it is challenged by the shift to remote working. Moody’s forecasts effective rents in the sector will also fall as average vacancy rates are forecast hover around 20% over the coming two years.

Rates

Currently, business rates are based on the open market rental value of properties back in 2015.

The way these rates are calculated means that large businesses pay the tax at 51.2p on every £1 of rent payable at that time in 2015, and for small businesses the rate is 49.9p in the pound. But now that retail rents have dropped so much due to the general retail decline and the pandemic, instead of being around 50% above the rent bill, the tax can amount to over 100%.

So, business rates are becoming detached from reality; the real valuations that exist today which means, despite rate reductions and exemptions for some businesses, paying them is a strain for most retail businesses.

David Cox of Colliers Internationals says that business rates are “so far removed from the commercial reality… in historical terms, this is going to look like a window and chimney tax.”

Biggest expense

Property company British Land says that plummeting rents now mean that business rates will be the biggest property expense faced by many shopkeepers. Matt Reed, head of retail asset management at British Land, one of the UK’s biggest retail commercial landlords says:

“The current system is out of touch with economic reality as rates payable are based on valuations made years ago.”

“Across our portfolio business rates have become disconnected from rental values, meaning some occupiers are paying higher business rates than they are rent, making it harder for shop owners to keep their shops open and support jobs.”

The British Retail Consortium (BRC) property policy advisor, Dominic Curran says that rates now regularly exceed rent “especially in the north… I know of cases where rents were basically zero and yet units were still unlettable due to rates.”

Heavily criticised

Even before the pandemic the government was being heavily criticised by retailers and landlords for failing to reform business rates. But now the next business rates revaluation has been pushed back, not due until 2023. The final report on a consultation on long-promised fundamental reform of the tax is not due till the autumn.

The government has been accused of “Groundhog Day” inaction over business rates. It has recently published an interim report on its “fundamental review of business rates”, which sets out a summary of responses to last year’s call for evidence.

The review launched last July was set to be announced this spring, but on the 19 February, chancellor Rishi Sunak announced that he was delaying the Treasury’s report until autumn. The Chancellor argues that delaying the report will enable him to make decisions when the economic uncertainty due to the pandemic has reduced.

Sunak emphasised what that government has done for the industry during the pandemic by extending the business rates holiday for retail, hospitality and leisure businesses in England for a further three months until the end of June.

However, most of the industry responses to the various concerns about the businesses rates system were calling for more frequent revaluations and a reduction in the multiplier (UBR). Also mentioned was the possibility of a “zone-based” valuation system and an online sales tax.

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