Edinburgh home-owner banned from short let in affordable housing

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Edinburgh Council is continuing its crackdown on the short-term letting sector by banning a home owner who bought a flat through an affordable housing scheme.

Enforcement officers stepped in after two neighbours
complained; one objected to noise disturbance and anti-social behaviour while
the other flagged up the fact the property had been bought through an
affordable housing initiative known as Golden Share. Under the council-backed initiative,
home-buyers can buy a property at 80% of the open market value – a significant
reduction in a block where the average property sells for just below £218,000.

Inspectors found the two-bedroom flat in
Elsie Inglis Way was being openly advertised for short-term holiday lets for
six people on various booking platforms, telling visitors they could check in
any time between 1pm and 11.30pm.

In their report, council enforcement officers
said the location of the flat on the ground floor and the number of people,
combined with the ability of guests to access areas of communal provision,
including a stairwell and landings, was having a detrimental impact on other
residents.

An Edinburgh Council spokeswoman
tells LandlordZONE: “We have taken enforcement action in this case and we’re
now working with Scottish Government to take forward new powers to regulate short-term
lets.”

The temptation to rent out to short term lets to reap the
large fees can be too great because it’s so lucrative, says Gavin Dick, local
authority policy officer at the National Landlords Association, but he adds: “There
are usually conditions around housing association purchases, such as if you
need to live there or are able to sub-let it because the council owns part of
the property.”

A licencing regime is set to be introduced by the
Scottish Government in the next couple of years.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Edinburgh home-owner banned from short let in affordable housing | LandlordZONE.

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The National Landlord Investment Show

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The National Landlord Investment Show is celebrating its 70th show to date with a return to Olympia, London on 19th March 2020 with Andrew Neil and Michael Portillo. 

FROM kickstarting their journey at their very first show in Croydon

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Call of the Week- Fitness for Human Habitation and repairs

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This week the advice team were able to help a member to understand the Homes (Fitness for Human Habitation) Act 2018. This piece of legislation will apply to all tenancies in England from March 20th 2020, and we have recently received more calls relating to this legislation as this date approaches. One of our members […]

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Budget 2020 – Landlord Reactions

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Chancellor of the Exchequer Rishi Sunak’s first Budget speech concentrated on bringing stability and security to the country using £12bn of fiscal action to combat the temporary effects of Coronavirus. The NHS was promised whatever resources it needed to tackle the virus with a £5bn response fund put aside.

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How will the coronavirus impact landlords?

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The Virus:

We’re all worried about the impact the virus may have on our lives, and if you’re in the older group its a particular worry. Holidays and trips booked, events planed, forward commitments all put in on hold.

If you run a business it’s a double whammy: cash-flow and profits may well be adversely affected, and if you are unlucky enough to live in a flood affected area, you could be even be unfortunate enough to suffer a triple whammy, what a ghastly year it’s been up to now.

Like other businesses, landlords are vulnerable to having their cash-flows disrupted when tenants are self-isolating or sick with the virus, some unable to pay rent. We can only hope the government comes quickly to the rescue as promised.

Richard Murphy, a chartered accountant who campaigns on issues of tax avoidance and tax evasion, is calling in his Blog for landlords to declare a rent amnesty for tenants who suffer with the coronavirus.

An adviser to the Trades Union Congress on economics and taxation, and Professor of Practice in International Political Economy at City University London, Mr Murphy says:

“There is simply too little economic resilience within the population as a whole… Far too many people have too few savings to survive major periods of economic inactivity without massive prejudice to their short-term and long-term well-being”

However, I think Mr Murphy is perhaps falling into the common trap by assuming that all private landlords are next-door to the landowning aristocracy: rolling in cash and able to sustain themselves as well as their tenants in this time of crisis.

Many landlords may well be wealthy enough to provide that kind of support, but I suspect there’s a big proportion of private landlords today who are working folks themselves, dependant on regular rent payments to pay their mortgages.

But, in any event, landlords may be called upon to re-schedule rent payments if tenants fall into hardship, and therefore all landlords should plan accordingly, speak to mortgage providers and if necessary their banks.

How landlords and agents are likely to be affected has yet to be seen, but we can speculate. For a start, moving may be be delayed or put on hold for some time, likely to affect agents more than landlords.

The stock markets are anticipating an adverse effect on real estate generally, with property investment trusts under performed the market during the market sell-off. The sector fell by 11.3% last week, compared with 11.1% for equities in general, that’s according to Numis Securities.

Within those figures though some players fared even worse: student lettings company, Unite Group, Britain’s largest provider of student housing fell by 15%, and that’s despite them just reporting a strong set of annual results. Why?, because of investor’s worries about the potential impact of the coronavirus.

Unite has 74,000 beds in 27 cities and its portfolio is valued at around £5.2 billion. Its shares price is up 22.7% in 12 months following its £1.4 billion acquisition of Liberty Living, its main rival.

Like-for-like rental growth in 2019 was up 3.4% on the year, better than the previous year’s 3.2%. But now the coronavirus outbreak threatens – Chinese students are thought to make up around 13% of Unite’s tenants, though 50 per cent may be UK based.

Despite the threat, the company expects growth of between 3 and 3.5% for next year, thanks to a combination of price increases and prudent asset management. They expect the impact of covid-19 on student numbers to be offset by the new government’s supportive policies for attracting overseas students, and a boost in Britain’s 18-year-old population.

Student housing is likely to continue to be a growth area as evidenced by a record-breaking deal by the world leading property fund manager Blackstone. They agreed to buy the iQ student housing company from Goldman Sachs and Wellcome Trust for £4.7 billion in what will be the biggest UK private property deal on record when complete.

On the other hand, things don’t seem so rosy in the retail sector. Shares in the shopping centre owner Intu Group have fallen sharply after the indebted owner of Lakeside Essex and the Trafford shopping centres after it had said it would push ahead with a cash call on its investors thought to be in the region of £1bn.

Intu has been hit by weak demand for its high street retailers, with struggling groups including Arcadia and Debenhams occupying a lot of space in its centres, and the coronavirus is just going to add to its troubles.

In a recent press release the company has said that

“While a number of intu’s shareholders and potential new investors indicated their support for an equity raise, the Board believes the current uncertainty in the equity markets and retail property investment markets precluded a number of potential investors from committing capital into the business and intu was therefore unable to reach the target quantum at the current time. However, during this process, intu received several expressions of interest to explore alternative capital structures and asset disposals.”

Doubtless the big boys will be hit, but the crisis will be no less severe for the small-scale private landlord, the student landlord and the smaller commercial property landlords with high street retail premises. The latter will no doubt be watching closely the Chancellor’s speech today for any sign of the anticipated help with business rates.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – How will the coronavirus impact landlords? | LandlordZONE.

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Bank Base Rate Slashed To 0.25%

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The Bank of England have decided to support today’s Budget, and the markets before they open, cutting Bank Base Rate by 0.5% from 0.75% to the previous post Credit Crisis low of 0.25%.

This is obviously helpful news for landlords who are on variable

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The day approaches when mandatory five-year electrical checks are required

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Electrical Checks:

Electrical safety
inspections and reports will become a mandatory requirement for all
new tenancies in England signed on or after the 1^st of
July this year.

Fines will be heavy
for those landlords who fail to have their rental properties tested
by a qualified electrician before letting, or if they fail to comply
with any of the important recommendations made in the test report.
The landlord will ordinarily have 28 days to make good any reported
defects or needed improvements, unless the issue is dangerous, in
which case it may be recommended the remedy is made sooner.

This article is
based on English law and is not a definitive statement or
interpretation of the law; rules change and every case is different –
ultimately only a court can decide. Other jurisdictions are similar
but there are important differences. Always seek expert advice before
making or not making decisions.

Local authorities
will have the power to issue a fine of up to £30,000 and where
necessary may carry out any recommended remedial work itself and
charge the landlord for this work.

The electrical
safety regulations were put before Parliament in January in order to
implement this long awaited change, which will bring electrical
testing in-line with the gas safety check regime and the electrical
regulations already operative in licensed Houses in Multiple
Occupation (HMOs), as well as the electrical testing regulations in
operation in Scotland.

The planned
implementation of the regulations for the 1^st of July,
providing there are no delays in the Parliamentary schedule in view
of the current health crisis, will not affect existing tenancies
until the 1^st of April 2021. Before then, landlords will
need to contact their existing tenants to make arrangements to have
the checks done.

Not all tenancies
will be affected by the regulations. Excluded ones will be:

• social
  landlords
• resident
  landlords, where the tenant lives in the same building.
• Landlords with
  lodgers
• long leaseholds
  and tenancies in excess of seven years or more.

• student
  lettings in halls, hostels, refugee care homes, hospitals or
  hospices.

Included in the
checks will be all electrical wiring and fixed electrical
installations. The checks must be carried out by an approved and
qualified electrician who will produce a report which must be shown
to tenants on entry to the property, or in the case of existing
tenants, up to 28 days following the checks on or before the 1^st
of April 2021.

Ordinarily new
checks and a new report will need to be produced on or before the
fifth anniversary of the previous checks, unless that is the landlord
makes changes to the electrical wiring or installations in the
rental, in which case earlier checks will be needed.

Given that there is
likely to be a heavy demand for qualified electricians to carry out
these checks, and any remedial work needed, it makes sense to be
prudent and for landlords to act sooner rather than later to make
sure they are compliant when the new law when it comes in – even if
it were delayed, it is certain to come in soon.

As with the gas
safety checks, landlords will need to produce and supply to tenants
the correct documents, including the electrician’s report prior to
any lettings, otherwise they may be unable to peruse a possession
claim if the need arises. Similarly, agents will refuse to let
properties lacking the correct documentation.

Landlords will also
need to plan ahead to balance their cash flows as this change has the
potential to cost them quite a lot of money, depending on the state
of the electrical systems in their portfolio of properties.

Most landlords will
appreciate the necessity of having their wiring and installations,
just as their gas systems, safe and free from defects. Most will be
brought up to the modern safety standards relatively inexpensively,
but it’s the rogue landlords, those with defective and dangerous
properties that this measure is aimed at.

These new
regulations will replace the already existing requirements and
regulations for houses in multiple occupation (HMO) to have the
electrical installations tested.

Should tenants
refuse landlords access for inspections and any required remedial
work, and this is not unheard of with gas checks, the landlord could
be considered to have breached this duty, even the landlord has tried
repeatedly. It is important therefore to keep the local authority
informed in this event, preferably in writing.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – The day approaches when mandatory five-year electrical checks are required | LandlordZONE.

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Can this new, neighbourly short let platform help to ease anti-AirBnB feeling?

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A new online platform for short-term let hosts in multi-occupancy buildings aims to provide reassurance to neighbours and councils.

Users of Trusted
Homes can sign up to notify buildings of their intention to short-let, predict
how many days they will be short letting for, and sign up to a raft of best
practices, including limiting guest turnover by only accepting bookings of
three nights or more.

As Airbnb comes under increasing attack from
tenants’ groups and councils who blame the short-term lets sector for helping to create a housing crisis in the region’s cities,
Trusted Hosts promises to offer a “much-needed
solution that will ensure an environment of trust and consistency”.

Launched this
week by trade body the UK Short Term Accommodation Association
(STAA), and digital property management firm Locale, the platform aims to make
it simple for short-term accommodation policies to be implemented throughout
whole buildings, as well as giving building managers and owners full visibility
of short-term activity. 

The scheme aims
to ease pressure on local councils through easily-to-access guidance; it
promises to share data with them about the number of users in their borough as
well as provide reassurance to residents that short-term arrangements in their
building are adhering to best practice.

Trusted Hosts is set to
be piloted in the London borough of Westminster (although no date has been set)
and could then be rolled out UK-wide.

Merilee Karr, chair of the
STAA, says: “Trusted Hosts will
provide building managers, short-term hosts and residents of multi-occupancy
buildings with the reassurance that short-term letting in their building will
be conducted in a trustworthy and conscientious way in accordance with our
guidelines.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Can this new, neighbourly short let platform help to ease anti-AirBnB feeling? | LandlordZONE.

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HB payments while tenant in prison?

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I had a call from the Probation Service yesterday asking if I had any objection to my tenant returning to the property after his release.
I had no idea he had even gone to prison! Apparently he was taken into custody mid Feb and due for release at the end of March.

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Coronavirus – what should I do?

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As the number of coronavirus cases in the UK climbs, landlords are asking what they should do regarding their lets. Firstly, it is important that any response is proportionate.   There are a number of things landlords might want to think about now, and prepare for the future, should the outbreak escalate.   Official guidance The first […]

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