Mezzanine Finance – a solution for building homes outside the big corporates

admin    Uncategorized     agents

The UK housing shortage will not be successfully addressed if we rely entirely on the major house builders. This is the view that was expressed by the government housing White Paper at the beginning of the year, which recognised both the importance of creating a diverse construction sector and the significant contribution that can be made by the development of smaller sites.

Securing the appropriate funding will be key in determining whether small developers are able to step up to the challenge and take advantage of this opportunity and, for many, achieving the right leverage at the right price will be the main consideration.

Conventional senior debt development finance was traditionally limited to around 50% gross development value (GDV), but it is now possible to secure finance up to 70% GDV with some specialist providers. This is known as stretch-senior debt and, while it offers greater leverage, it is also more expensive than senior debt.

An alternative to stretch senior is to split the financing into two layers of debt instead of one.  The first layer, the senior, can be structured conservatively at low cost, often by a large bank.  On top of this senior layer sits a strip of mezzanine debt from a specialist provider in a second charge, subordinated position.

In isolation mezzanine finance, or “mezz”, looks expensive, but when it is blended with a bigger chunk of cheap senior debt, the overall cost can be lower than a stretch senior deal can achieve.

There is more work in assembling and managing a structured solution that includes mezz, but for some developers it can provide a cheaper way of securing increased leverage on their schemes.

If you are a developer and would like to discuss how you could use mezzanine finance on your next development, please complete the contact form below and we will be happy to help.

jQuery(document).bind(‘gform_post_render’, function(event, formId, currentPage){if(formId == 214) {} } );jQuery(document).bind(‘gform_post_conditional_logic’, function(event, formId, fields, isInit){} ); jQuery(document).ready(function(){jQuery(document).trigger(‘gform_post_render’, [214, 1]) } );

The post Mezzanine Finance – a solution for building homes outside the big corporates appeared first on Property118.

View Full Article: Mezzanine Finance – a solution for building homes outside the big corporates

Student Rents remain static says new report…

admin    Uncategorized     agents

Student Landlords:

A new report highlights static accommodation costs across England in the wake of rising student debt.

An annual report (1) into student accommodation, compiled by Glide Utilities, the student utilities and service provider, has found that private student rent has remained at an average of £100 – £119 a week, for the second year running.

The news comes as a respite for students, who face increasing debts, with the Institute for Fiscal Studies (IFS) last month reporting that students in England are likely to graduate with debts just shy of £60,000. (2) The fourth annual ‘What Students Seek’ report found that 20% of students don’t envisage paying off their loans, a number that is dramatically out of sync with the IFS, which forecasted that three quarters of students will never be able to pay off their loans.

Accommodation represents the second biggest spend for students during their studies following fees. The What Students Seek report found that 72% of students pay between £80 and £139 per week. University locality creates some variance with 15% of London students paying over £200 a week, and 69% of students in the North East paying less than £90 a week.

Almost half, 45%, of students surveyed said their accommodation offers good value for money, but 36% disagree, suggesting that while rents remain static, landlords need to understand students better to attract and retain the best tenants; a growing concern given the continued increase of modern student developments on the market. (3)

The annual What Students Seek report uncovers what students look for when it comes to their accommodation to reveal common themes that could help landlords improve the market appeal of their HMO property.

Key insights from the 2017 report:

Less is more: On average students live with four other people, with 39% sharing with five people or more. However, when asked how many people they’d ideally like to live with, almost half, 48%, indicated they’d like to share with just two or fewer people in their next property.

Switch off the TV:  It appears that a television is not going to sway students into renting a property. The majority, 60%, rated having a TV as the least important factor when choosing accommodation. After cost, a fast broadband connection is by far the most important factor for students, followed by good storage space, bills inclusive and double beds.

Management: The majority of students are positive when it comes to the way their property is managed; 57% shared this view. However, almost a quarter, 23%, felt negatively citing the following top issues to be causing problems:

Lack of response on maintenance issues, (37%)

Poor upkeep of the property, (30%)

Lack of communication, (28%)

Bills included: Three quarters of students said that having bills included in their rent was either essential or quite important when considering a property, making this an easy fix for landlords and letting agents in attracting tenants.

Incentives: One in 20 students said they had been given either a cash or non-cash incentive for taking their current property. Although very low, 2% said they had been taken out for a drink by their landlord

The report also revealed the best university cities for landlords to invest in, based on overall tenant satisfaction ratings and annual yield. (4) Although there are great investment opportunities across the UK, university cities in the North East consistently rate highly for both annual yield and tenant satisfaction, with properties in Middlesbrough providing a 16.1% annual yield4 and 82% satisfaction rating. Durham and Sunderland followed close behind while on the other end of the scale, London rated lowest with just a 2.7% annual yield and 76% satisfaction rating.

Outside of accommodation needs, the report also pointed to a decline of the infamous student social life. When asked how respondents funded their social life, almost one in five, (17%) admitted that they didn’t have one.  Despite this over a third still rated the proximity to bars and clubs as an important factor when choosing accommodation.

James Villarreal, CEO at Glide Utilities said of the 2017 What Students Seek Report; “It’s good news for students that private rental costs remain static, especially since the price of living in Halls of Residence continue to rise. However, it’s very likely that costs will rise moving forward as the ban of tenant fees will inevitably get passed through to the price of the rent., therefore landlords and agents can offer students greater value for money  by offering bills included and ensuring that properties are well maintained and efficiently managed”

What Students Seek was commissioned in April and May 2017 by Glide Utilities. 722 students responded to the report via www.accommodationforstudents.com, the UK’s leading student accommodation website. The full report can be downloaded here.

1. Results taken from a survey of 722 students in April and May 2017 as well as year-on-year data obtained from previous surveys and focus groups conducted by AFS.
2. From a report by the Institute of Fiscal Studies, July 2017
3. In May 2017 the property advisory group, JLL, predicted that 2017 would see a higher amount of investment in the student housing market.
4. Average annual yield research taken from the Rightmove House price data, May 2017 and the Student accommodation rent report 2016 (Accommodation for Students). Average weekly rent multiplied by 3 tenants, multiplied by 52. The average annual income divided by average property price, multiplied by 100. Full report available upon request.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Student Rents remain static says new report… | LandlordZONE.

View Full Article: Student Rents remain static says new report…

Tenants saved by existing landlord in fake landlord scam

admin    Uncategorized     agents

A fake landlord used Facebook to copy and paste property details and pictures from a rental listing on Rightmove and scammed prospective tenants from Plymouth out of £1,200.

Jenny Foster-Mitchell, who was taken in by the imposter, reported to the local paper The Herald (click here to see article) saying:

“The house was listed at £600 per calendar month including bills. It looked perfect. We got in touch at the end of August by commenting on the post.

“We didn’t get a reply straight away so we sent a direct message to the landlord on Facebook asking for more details. We got a message back giving us more details and letting us know that pets were welcome in the house, which was perfect for us.”

When Jenny asked to view the property she was told the agents had the keys, but she could go and visit the property with her partner to look at from the outside

Jenny said: “She (the imposter) said we could go and have a look at it through the windows to see if it was what we wanted. “We went and had a look at it and it was exactly the same as the photos.

“We were very keen to find somewhere new and we liked it so we were happy to go ahead with it. We were sent a tenancy agreement which we completed and sent back. Everything seemed normal.”

Jenny and her partner agreed to pay one month’s rent and one month’s deposit in advance to secure the property.

However the imposter then got greedy and asked Jenny to pay £400 for maintenance before they move in.

Jenny reported: “I was thinking, we shouldn’t have to pay for maintenance, and this was even written into the tenancy agreement we had signed, but then she threatened to add the bills to the monthly rent so we agreed.

“At this point we were getting wary, but we were so desperate to get out. We had made all of the other payments through online bank transfer, but this time she wanted us to use MoneyGram.

“We did attempt to make the £400 maintenance payment but MoneyGram wouldn’t release it, thank god, until I spoke to them to confirm the details.

“Shortly after this, we decided to search for the property and came across it on Rightmove. That is when it all unravelled.

Jenny contacted Martin & Co the listing agent who confirmed that the name of the fake landlord they had been dealing with did not match the name that they had.

“We confronted the woman (imposter) and she said that she didn’t like not being trusted and then blocked us.”

However, after giving notice on their existing property the current landlord came to the rescue.

“Thankfully our current landlord allowed us to retract our notice. They have been brilliant throughout this ordeal and have really helped us.”

Director at Martin & Co, Chris Whitaker told The Herald: “In this particular instance, we were made aware by the victim of this ‘scam’ and that some of our marketing images had been extracted from our website and used without consent on Facebook by an individual purporting to be the landlord.

“We immediately recommended that the tenant contact the police to report the incident and have also sought to identify other potential options to support the victim in finding alternative accommodation. Unfortunately this type of property scam is becoming increasingly common throughout Devon.

“Our advice to all potential tenants is to be extremely cautious when it comes to passing money to unregulated agents or landlords who are able to act anonymously and with relative impunity through various internet sites and online forums.

“Tenants should instead seek to use regulated agents who are members of the Association of Residential Letting Agents and members of a government approved Client Money Protection scheme.”

A lesson for due dilligence, but a partial good news story in the end.

The post Tenants saved by existing landlord in fake landlord scam appeared first on Property118.

View Full Article: Tenants saved by existing landlord in fake landlord scam

NLA Budget recommendations

admin    Uncategorized     agents

Ahead of the Chancellor’s next budget on the 22nd of November the National Landlords Association (NLA) has made representation to HM Treasury focusing on support for investment in the Private Rental Sector (PRS) and implementation of the Homelessness Reduction Act.

The summary of the recommendations are:

1) Embark on an immediate review of the removal of finance cost relief for private landlords

2) Introduce a package of Capital Gains Tax reduction measures to encourage the sale of:

• Poorly performing investment properties.
• Properties where the proceeds of the sale will be entirely reinvested into the lettings business.
• Properties invested in, and utilised, for a period of more than 10 years.
• Properties that are eligible and suitable for sale to existing tenants.

3) Introduce measures to facilitate the tax-efficient movement of a letting portfolio into a corporate structure.

4) Establish a government-backed investment vehicle to allow the sale of properties into a managed fund.

5) Reintroduce the Landlords’ Energy Saving Allowance (LESA), and establish a level sufficient to improve the tax efficiency of carrying out relevant works.

6) Set LESA at a level sufficient to improve the tax efficiency of carrying out works

7) Fund the expansion of Help to Rent nationwide

8) Establish a national deposit guarantee scheme for the private rented sector

9) Remove the Capital Gains Tax surcharge for property sales

10) Introduce Capital Gains Tax tapering and business asset rollover relief for private residential property which is let.

11) Abolish the Stamp Duty Land Tax levy on additional property

To download the full NLA Budget submission to the Treasury please Click Here

The post NLA Budget recommendations appeared first on Property118.

View Full Article: NLA Budget recommendations

Landlord Law Workshop – Consumer Law & Landlords

admin    Uncategorized     agents

Consumer Law:

The consumer law rules apply when a ‘supplier’ provides a product or services to a ‘consumer’.

• If you are a letting agent then you are a ‘supplier’ to landlords and tenants.
• If you are a landlord you are a ‘supplier’ to your tenants but will usually be a ‘consumer’ to letting agents.

How does this affect your business?

Consumer law is generally all about fairness and the regulations are generally providing for you to behave (if you are a supplier) in a fair way, and penalising you if you fail to do this.

But

• What is ‘fairness’,
• What obligations does it place on you if you are a supplier, and
• “hat are the penalties imposed on you if you fail to meet the standards?

This is the subject of a special workshop from Easy Law Training and solicitor David Smith which will be taking place in Norwich on 8 December 2017.

Here are some of the things David will be looking at:

• The formal requirements on suppliers regarding the provision of information and  (for letting agents) transparency as regards fees
• The rights and obligations of landlords and agents as regards commission for tenancy renewals
• ‘Fairness’ rules and advertising properties
• The circumstances under which consumers can end contracts – eg agency agreements or tenancies – where the various ‘fairness’ rules have not been complied with
• Property Redress Schemes and
• Codes of Conduct

Many landlords and agents do not consider that the consumer legislation applies to them.  It is true that this legislation is not well known and therefore not well used by consumers.  However, this is changing and it is better to be compliant and safe than non-compliant and vulnerable to the penalties (which can sometimes be severe).

As usual with a David Smith workshop, you will come away with all the information you need to ensure that you are compliant with the law.

Find out more here

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Landlord Law Workshop – Consumer Law & Landlords | LandlordZONE.

View Full Article: Landlord Law Workshop – Consumer Law & Landlords

Choke off buy-to-let call from Tory MP

admin    Uncategorized     agents

Landlords targeted:

Neil O’Brien, Conservative MP for Harborough and a former adviser to Theresa May and George Osborne, says: “Choke buy-to-let to help deliver home ownership for young voters” in a recent article for the FT.

The Conservatives are desperately trying to identify policies which would put a stop the party’s dramatic loss of support from younger voters, which will likely include easing the burden of tuition fees and reducing housing costs for the young.

It is thought likely the prime minister will outline new thinking on these issues at the upcoming party conference in October, after opinion polls are suggesting that the Tory’s lead over Labour in June’s general election only exists among voters over the age of 47.

O’Brien argues that children of baby boomers are now missing out on the opportunities their parents had, with their free tuition and affordable housing.

Arguing in the FT that the traditional (Thatcher) Conservative policy of encouraging more home ownership had slipped dramatically and was damaging the party, he says: “over the past 10 years, the proportion of 16-34-year-olds owning their own home fell from roughly half to a third. Baby boomers were 50 per cent more likely to own their own home at age 30 than millennials (born 1981-2000).”

The call for a fresh war on buy-to-let landlords comes as a new report from payment firm WorldFirst puts the UK down 10 places in the European rankings for buy-to-let property returns, with Ireland, Malta and Portugal named as the top three best nations for landlords. The report puts Britain at 25th best place in Europe for private landlords, with average rental yields of 4% and as low as 2% in some parts of London, whereas as Ireland comes in at 7.08%, Malta at 6.64% and Portugal at 6.43%.

Still reeling from George Osborne’s swinging tax increases over the last couple of years, buy-to-let landlords, many of whom are traditionally Conservative supporters, are unlikely to welcome O’Brien’s intervention.

There are an estimated to be around 22.8 million households in England. No one knows the exact number of course, but of these, it is estimated around 14.3 million are owner-occupied, making up 63pc of the market – a figure much to the consternation of some in the Conservative ranks, as home ownership is party policy – down from its peak of 71pc in 2003, but the figure has remained unchanged for the past three years.

The vast majority of the UK’s private rented housing stock is owned by landlords with just a single property – in the main small-scale landlords who invested for their pensions when other forms of investment offered derisory returns.

Despite significant institutional investment in the sector, which is growing, encouraged by government policy and tax breaks for large-scale developers, over 93% of landlords in the UK have a single rental property and together they account for 81% of privately rented stock.

These landlords are unlikely to thank a so called “business friendly” party for scapegoating them for a housing shortage which they would argue is not of their making and which in fact, it may be argued, they have largely helped to alleviate.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Choke off buy-to-let call from Tory MP | LandlordZONE.

View Full Article: Choke off buy-to-let call from Tory MP

It’s happened again!

admin    Uncategorized     agents

Once again, after I have given 2 months notice to quit to tenants, they have failed to pay the rent due for the last month of their tenancy. These particular tenants won’t enter into a discussion about it and won’t let me into the property to inspect it so that I can write a reference and return their deposit, so I’m guessing the house is a real mess…… aaargh!

Any suggestions as to how to avoid this situation in the future?

Thanks

Tricia

The post It’s happened again! appeared first on Property118.

View Full Article: It’s happened again!

Landlord hits back at Council after Guardian article

admin    Uncategorized     agents

An article in the Guardian yesterday purporting to expose rogue landlords had the headline “London council finds 35 men living in one three bedroom house”

In the property eight men were found with wall to wall mattresses in one room. Click here to read the full article.

However, the owner, Dr. Sunil Hathi, has threatened to take legal action against Brent council for publicly outing him as a ‘Rogue Landlord’.

Doctor Hathi confirmed that he originally let the property to only three people and was shocked that the property  was being used in this way and was looking to evict the men as soon as possible.

Dr Hathi said: “I have no idea how many people are living at this address, it was originally rented out to three people. This is the first time I have come here in the month they have been living here. We were not aware they were staying here and we are going to evict them.

“Brent council put out a statement to the press saying that it was a ‘Rogue Landlord’ and I resent these comments. They’re highly defamatory and I am speaking with my lawyers.

“I’m not running away from anything, why would I? This house is worth a lot of money. They could have found me in minutes on the land registry.”

The story was uncovered after the council raided the property following complaints from neighbours about overcrowding, anti-social behaviour and fly-tipping.

The Guardian got a quote from Brent Council saying: “Rogue landlords make their money by exploiting people who can least afford it, it’s a shameful practice and this is an especially shocking example.”

However, they failed to find the landlord and only sought a quote from one tenant who was Romanian and could not speak English.

We will have to wait and see what the full facts are in this saga.

The post Landlord hits back at Council after Guardian article appeared first on Property118.

View Full Article: Landlord hits back at Council after Guardian article

Reinstate claim or start a fresh claim after court fee debacle?

admin    Uncategorized     agents

I was wondering if there are any solicitors on here who could advise me on the following. I have taken a guarantor to court for rent arrears from a previous tenant of mine.

After sending in all the documents I intend to rely on in court along with my witness statement and cheque for £170 for the trial fee that needed to be paid before the 8th Septemeber 2017 I noticed that the cheque had not been cashed by the court.

After calling them up on 8th September I asked them why the cheque had not been cashed and they said they didn’t receive the cheque (it was clearly stapled to my witness statement). I was advised by the court to cancel the cheque with my bank and to pay the court fee over the phone by card.

I phoned my bank and cancelled the cheque then called back the court to make the payment. I was told the bailiffs was using the card machine so they was unable to take the payment. I phoned back a further two times to make the payment to be told that the card machine was still in use. I then called back again a fourth time and the card machine was available this time, but it was past the 2.30pm cut off period to take the payment for the day and I was told to call back in the morning to make the payment.

I explained to the court that I was going away for a week and I needed to make the payment urgently and they told me to send in an email to explain this to the court. So I did just that I sent an email asking for an extension for the payment as I was away for a week and I would make the payment on my return I also explained that I had sent in a cheque and tried to make the payment four times that day.

Anyway cut along story short on my return I called up the court to be told that the claim had been struck out and I have to pay a £255 fee to have it reinstated which am not best pleased about.

The advice I am after is do I have to pay the £255 to have the claim reinstated or could I just start the claim from scratch all over again which only cost me £105 and this time I could add on the interest to the claim which should cover this amount.

So my question please to anyone that could give advice would be: Do I have to pay to reinstate the claim a fee of £255 or could I start a fresh claim which would only cost me £105.

Many thanks

Stephen

The post Reinstate claim or start a fresh claim after court fee debacle? appeared first on Property118.

View Full Article: Reinstate claim or start a fresh claim after court fee debacle?

Dr. Ranj Singh supports Gas Safety Week

admin    Uncategorized     agents

Landlord Gas Checks:

The seventh annual Gas Safety Week (18^th – 24^th September) sees organisations across the UK private rented sector (PRS) working together, to raise awareness of the dangers of poorly maintained gas appliances, which can cause gas leaks, fires, explosions and carbon monoxide (CO) poisoning.

Promoted by the Gas Safe Register, the organisation that registers all approved gas engineers, it is appealing to all organisations involved to be part of the campaign and to save lives by spreading the word about gas safety.

Dr. Ranj Singh resident doctor on ITV’s This Morning and presenter, and creator of kids show Get Well, is supporting Gas Safe Register to raise awareness of carbon monoxide (CO) poisoning and its symptoms as a third (32%) of people would not recognise them, misdiagnosing symptoms for other illnesses.

CO poisoning is known as the ‘silent killer’ as it has no smell, taste or colour, and all the symptoms associated with CO poisoning can easily be mistaken for something else as today’s research shows.

CO poisoning is known as the ‘silent killer’ as it has no smell, taste or colour, and all the symptoms associated with CO poisoning can easily be mistaken for something else as today’s research shows.

This Gas Safety Week Dr. Ranj Singh is supporting Gas Safe Register to raise awareness of carbon monoxide (CO) poisoning and its symptoms as a third (32%) of people would not recognise them, misdiagnosing symptoms for other illnesses.

Worryingly, one in 10 (9%) don’t know CO poisoning symptoms at all. These symptoms which include headaches, nausea, breathlessness, collapse, dizziness and loss of consciousness, would be misdiagnosed by many as:

• Concussion (37%)
• Meningitis (36%)
• A panic attack (27%)
• A stroke (22%)
• Flu (19%).

Gas Safe Register is urging people to learn the symptoms of potential CO poisoning, and what action to take if they suspect they or someone in their family may be suffering from it.

Dr Ranj Singh said:

“You can’t see, taste or smell CO, so it’s really important that people become more aware of its poisoning symptoms. As Gas Safe Register’s research has found, many confuse CO poisoning for other illnesses such as flu, but CO poisoning can be fatal so it’s important that we raise awareness this Gas Safety Week so that families can take the right precautions and stay safe.”

Jonathan Samuel, chief executive of Gas Safe Register, said:

“CO can leak from badly fitted or poorly maintained gas appliances. We recommend proactive prevention as the first line of defence against CO poisoning by getting your gas appliances checked every year by a Gas Safe Registered engineer to make sure they’re working safely and efficiently. To provide peace of mind, a CO alarm is a great second line of defence to alert you to a potential leak.”

Gas Safe Register recommends taking the following action if you suspect you might be suffering from CO poisoning:

• Leave the house and get fresh air immediately
• Open doors and windows
• Turn off gas appliances
• Call the Gas Emergency Helpline on 0800 111 999
• See your doctor immediately or go to hospital

If suffering from CO poisoning, most people know to open the windows (68%), leave the house to get fresh air (74%), and contact a Gas Safe Registered engineer to come and inspect to see if there’s a problem (42%).

To find out about landlord gas safety checks visit www.StayGasSafe.co.uk and to find a Gas Safe registered engineer call 0800 408 5500 or visit www.GasSafeRegister.co.uk.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Dr. Ranj Singh supports Gas Safety Week | LandlordZONE.

View Full Article: Dr. Ranj Singh supports Gas Safety Week