Scots Ministers avoid revealing how many landlords are seeking big rent rises

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The Scottish Government has decided not to publish details of how many landlords north of the border have applied to raise their rent above the 3% maximum allowed under the country’s Cost of Living (Tenant Protection) (Scotland) Act.

This controversial legislation was first introduced in October 2022 but extended several times until March next year, capping rent rises between tenancies at 3% but allowing landlords to apply under ‘exceptional circumstances’ for rises of up to 6% if theyu’ve been ‘impacted by the cost of living crisis’ and need to recover some increased costs associated with letting their property’.

This is done via the Rent Service Scotland where there applcation is reviewed and decided. Tenants who think their rent increases are unstified can also use the service to get mediation.

The Scottish Government originally said it would publish an update on how many landlords had applied to raise rents due to ‘exceptional circumstances’ in April this year, but this has now been kicked into the long grass.

A Government spokesperson has told LandlordZONEthis is because under the rules of the Act, Ministers most recent ‘Statement of Reasons’ removes the need for this data to be released.

But it is also lilkely to be political – Scottish ministers would look compromised if, after promising to curb rent increases, a deluge of landlords had successfully applied to raise rents significantly.

One letting agent operating in Glasgow and Edinburgh, who wishes to remain anonymous, says Ministers’ desire to keep the rent rises data under wraps is becuase the “RSS will be inundated with applications and knowing the Scottish Government, it will not have the manpower in place to deal with the volume of applications it receives”.

Removal

But the Government spokesperson pointed LandlordZONE to the most recent ‘Statement of Reasons‘ report from June, which says: “The first Report was laid before Parliament on 12 January 2023 and reports [were] due three-monthly thereafter… unless there has been a Statement of Reasons laid before Parliament during a reporting period.

“The Statement of Reasons published on 27 January removed the need for a report to be laid at the end of April (per section 9(8) of the Act).

“The next formal report was therefore due to be laid by 14 July 2023, but this 2nd Statement of Reasons would once again remove the need for that report.

“The requirement to keep the provisions under review remains ongoing and we will also continue to give consideration to the evidence available to us, with interim updates on the Act being provided as required.”

View Full Article: Scots Ministers avoid revealing how many landlords are seeking big rent rises

Landlords warned over increase in unauthorised and illegal sub-letting by tenants

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Sub-letting is on the increase within the private rented sector as the cost of living crisis bites, it has been reported.

Direct Line says nearly half of all tenants who sublet rooms within their property have not told their landlord or checked they are allowed to within their rental contracts.

The insurer polled some 600 tenants within the private rented sector recently and says the figure represents an increase in the number of tenants subletting.

But Direct Line’s own advice pages make it clear that this ‘subletting’ is to a significant extent created by unauthorised rent-to-rent operators within the private rented sector.

The primarily the insurer pins this on more tenants seeking to offset the recent and ongoing rise in rents within the UK.

“With the market having seen an increase in average rents in the last year, it is hardly surprising that a larger number of renters are tempted to offset this expense by subletting their property,” says Sarah Casey (pictured), landlord product manager at Direct Line business insurance.

“Landlords and tenants need to be aware that subletting has serious insurance implications.

“Subletting is not covered under most landlord insurance policies, so it’s really important that landlords make tenants fully aware of the restrictions on the lease and maintain that communication to help prevent any breaches.

”Tenants also need to be aware that their contents insurance is very unlikely to cover any theft or damage to personal property in the event of subletting.”

The research also reveals that three quarters of tenants get away with the practice, with just 23% of landlords eventually finding out that a tenant has been subletting.

Read more about subletting and insurance.

View Full Article: Landlords warned over increase in unauthorised and illegal sub-letting by tenants

BTR makes another leap forward with £1.26 billion invested in just three months

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The UK’s build-to-rent (BTR) stock now stands at 88,100 completed homes, with a further 53,500 homes under construction and 111,800 in the planning pipeline.

Savills research reveals that in the second quarter of the year, the sector saw a record-breaking £1.26 billion invested in 18 deals for the period; 8,300 homes have been funded since the start of the year, and although BTR only makes up 1% of privately rented homes, the sector is expected to grow as new investors emerge.

Family homes are proving particularly popular, making up 58% of investments in Q2.

“In tougher economic conditions, delivery of individual houses offers diversification of investment strategy and unit-by-unit handovers meaning operations can often commence faster than larger apartment blocks which have longer delivery timescales,” says Savills.

Increasing share

BTR is also taking an increasing share of new home sales, particularly in London. In Q1, BTR schemes made up nearly half of new housing sales in the capital, according to Molior data.

“Assets in London represent a unique proposition, given multifamily makes up less than 1% of privately rented homes in the capital. With new supply inevitable, there is a window of liquidity before the next wave of capital enters the market,” the report says.

It adds that operators in the current market are learning valuable lessons when it comes to operational efficiencies, enabling them to run their assets more efficiently and limit gross-to-net losses.

“As rents increase, tenants become increasingly discerning. Operators that can deliver superior levels of service will be able to differentiate themselves in the market.

“We believe this to be the next wave of segmentation, with those operators offering the highest levels of service generating the greatest returns, as has been the case in the hospitality sector for decades.”

View Full Article: BTR makes another leap forward with £1.26 billion invested in just three months

Property Investor Awards nominations closing

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Do you want to become an award-winning property investor? Get your nominations in fast as the deadline for the Property Investors Awards is closing soon!

The deadline for submitting nominations is less than a few days away on the 31st of July.

View Full Article: Property Investor Awards nominations closing

Are subletting tenants destroying the PRS?

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Short-term letting has become extremely popular in recent years but whilst it may be one of the fastest-growing accommodation channels there is a darker side.

Tenants who sublet without the landlord’s permission can make a huge fortune by renting out a home on Airbnb whilst the landlord is left to pick up the pieces when things go wrong.

View Full Article: Are subletting tenants destroying the PRS?

No need to evict! We sell buy-to-lets in 28 days to new landlords who want to keep your “fireproof” tenants

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They’ve been dubbed “fireproof tenants” – news this week reached fever pitch for landlords who rallied together in outrage to hear that multiple local councils had advised tenants “not to move out of their houses” no matter what, even if the landlord was in financial difficulty and needed to sell.

It’s shocking, but it comes as no surprise to landlords who’ve been under pressure over a looming eviction ban. It seems as if that time is well and truly here.

But if you thought you’d lost your window to sell your properties before financial situations escalate, Landlord Sales Agency have the solution. You’ve no doubt heard of us from various articles, well there’s a reason we’re the most trusted and best at portfolio exits.

We help landlords sell, get the best possible prices, faster than anyone else and without having to worry about tenants, even ones that won’t leave. In many cases we’ll even get you higher than the current market value.

We also sell your entire portfolio, or however many properties you need to sell, in less than a month. Our average sale time is less than 28 days. What’s more, and crucially, we can do all of that without you having to evict your tenants.

Furthermore, our team of experts know exactly what to do to help tenants in the situations that caused the problems in the first place, meaning that both landlords and tenants walk away happy. Unprecedented results for our industry.

How do we do it?

Our private buying database of over 30,000 buyers is full of new landlords interested in coming into the market and taking the properties off your hands no matter what issues. With fresh investment, they are more than happy to take on a new project with tenants regardless of the situation, allowing you to do what many of us need to do – fast – exit the market and cut our losses while we still can.

At Landlord Sales Agency we:

• Sell tenanted properties easily as we get cooperation of the tenants to assist in the sale. We do deals with tenants when landlords sell to either leave or in many bases we simply sell to another, new landlord who is happy to take the property on

• For vacant properties we can sell ‘as-is’ or assist landlords with refurbishments (both costs and builders) to clear/repair/refurbish and get the best price. We can project manage or assist landlords on what to do with a full team

• If landlords need funds to pay tax bills, refurbs and mortgage shortfalls – we can make those cash advances (subject to situation). We’re so confident in what we do, we know we’ll simply get our money back in the future from the sale

• For appropriate properties; we can sell on market through our modern auction and investors – and off market if landlords want the least hassle for tenants

• We can also sell properties with other B2B agents to maximise speed and price (e.g. other auctions houses and local agents) – and have every angle and opportunity to sell a property for a landlord – either we sell it or manage our trusted B2B partners to help sell it

• We manage the whole property-portfolio sale from start to finish to get properties sold and win-wins for tenants/landlords and we will help tenants and landlords financially if needed for extra difficult situations

Put simply, there’s absolutely no issue we cannot overcome. We’re fast, efficient, and we care about solutions for everyone involved. We’ll not only get you the best price you need for your buy-to-lets, we’ll make sure everyone walks away happy.

You won’t get a service like us from any other auctions or Estate Agents. Our formula one style team of landlord experts and builders will solve every single issue you may have with your properties in record time allowing you to sell this month, not in a year’s time.

Landlords aren’t the “bad guys” – we need help more than ever, and Landlord Sales Agency are here for precisely that.

So get in touch today, and let us help you exit the market in the strongest possible financial position.

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View Full Article: No need to evict! We sell buy-to-lets in 28 days to new landlords who want to keep your “fireproof” tenants

No need to evict! We sell buy-to-lets in 28 days to new landlords who want to keep your “fireproof” tenants

admin    Uncategorized     agents

They’ve been dubbed “fireproof tenants” – news this week reached fever pitch for landlords who rallied together in outrage to hear that multiple local councils had advised tenants “not to move out of their houses” no matter what, even if the landlord was in financial difficulty and needed to sell.

View Full Article: No need to evict! We sell buy-to-lets in 28 days to new landlords who want to keep your “fireproof” tenants

HOT MARKET: Every property put on market receiving 20 viewing requests

admin    Uncategorized     agents

Rental properties in the North West are each attracting an average of 30 viewing requests as competition among prospective tenants grows more intense.

Data commissioned by the BBC from Rightmove shows an average of 20 requests to view each available property in Britain, up from 19 the previous year, and six in 2019. In every region, the number has at least tripled since 2019.

Anecdotal evidence shows tenants are offering more than the asking rent or arriving early to get to the front of the queue.

Paul Forbes (pictured), an estate agent in Preston, told the BBC that properties were often let after the first block viewing of interested home-hunters because demand is so high.

This demand has soared as rising mortgage rates and costs are prompting some landlords to sell up. The resulting mismatch in supply and demand has contributed to sharp increases in rents.

Rents are also rising at their fastest annual rate since comparable records began in 2016, with the average rent paid in England now £960, according to ONS figures.

Imbalance

Aneisha Beveridge (pictured), head of research at Hamptons, says London rents will continue to rise as landlords in the area are selling up, because profits had dropped – with 43% fewer homes available to rent in London compared with 2019.

“That imbalance is what is fuelling rents at the moment,” she says. Rent increases are likely to continue, adds Beveridge, while the profile of tenants could also start to shift. Younger people could live with parents for longer, and more than one million over 65s would be renting within a decade.

View Full Article: HOT MARKET: Every property put on market receiving 20 viewing requests

NEW: £30 billion cost for landlords to upgrade properties to EPC minimum

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More than half of all homes in the private rented sector need upgrading to achieve an EPC band C by 2028, with landlords facing a total estimated bill of £30 billion at a time when many are struggling to cover their costs.

About 2.9 million properties are affected, with costs for upgrades ranging from £8,807 per property (EPC D) to £27,366 (EPC G), according to new analysis from Savills.

The bulk of the problem remains with older housing stock as more than two-thirds (71%) of homes built before 1950 were given an EPC below C in 2021-22, while just 12% of property built post-1995 need improvements.

Landlords’ costs could be capped at £25 billion if the government were to impose a limit of £10,000 per property, as has been proposed. 

However, the government has appeared to acknowledge its targets are too ambitious as earlier this week Housing Secretary Michael Gove suggested a delay in bringing in energy efficiency plans for the PRS. Citing financial pressures on landlords, he told The Telegraph that the government should relax the pace of changes to EPC targets.

Challenging

Lucian Cook (pictured), Savills’ head of residential research, says funding these works will be challenging. While low-cost options such as low energy lighting and installing heating thermostats have been fairly widely adopted, the cost of big-ticket items, such as solar PV and heating, solid wall and solid floor insulation remain significant barriers to further improvement for many.

“If the programme to introduce these changes is pushed back, it will reduce some of the immediate financial pressure on landlords and give them more time to plan works effectively,” he adds. 

“However, current mortgage costs and the end of assured shorthold tenancies are still likely to cause some buy-to-let investors to re-evaluate their position, constraining supply and adding to upward pressure on rents.”

LandlordZONE editor Nigel Lewis recently found out the cost of upgrading his property to a ‘C’ from a weak ‘D’.

View Full Article: NEW: £30 billion cost for landlords to upgrade properties to EPC minimum

‘Stop demonising landlords, it’s just not helping the situation’

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“Be careful what you wish for” is the point I would put to organisations such as Shelter, Generation Rent and other tenant groups. 

In other words, stop demonising landlords – it’s not helping the situation especially when we have such a severe rental stock crisis. 

Social housing and temporary accommodation are at breaking point; the private rental sector has been trying to prop them up for years. If you keep poking the bear, it will eventually bite back.

To be clear, I have a lot of sympathy for tenants having to pay more in rising rents, but landlords who are coming off two and three year fixed terms at 2% onto new arrangements at 6.5 % have little choice – their monthly mortgage payments have gone up dramatically. 

Previously, many of the landlords I spoke to had not historically put rents up, as they are very happy with their tenants. Now, the vast majority, forced by the rising cost of living including mortgages, energy, food, and council tax (to name but a few), are being forced to increase rents.

Sell up

We have reported many times on stories of landlords deciding they have had enough and want to sell up, not just because of interest rates, but on top of the withdrawal of Section 24 mortgage interest relief, and now the impending Renters (Reform) Bill. 

The worry that landlords will struggle to gain possession of their property once Section 21 is abolished, as well as the future EPC upgrades in 2028, for some it is just not worth the aggravation of being a landlord anymore, especially when landlords are feeling ashamed of being called a landlord. 

The reality is being a landlord is a profession, but it is not recognised by the swider media as such. If you look at the 12-point plan for the Renters Reform Bill, its intention is to increase property standards, provide greater access to property information, offer tenants redress, as they are customers, prevent discrimination against tenants with children or on benefits, and give tenants the opportunity to request a pet. 

Not unreasonable

These are not unreasonable. But what we need to see in conjunction are changes which also give landlords confidence in the new system when it comes to the abolition of Section 21. 

Will there be sufficient mandatory grounds under section 8?  Will there be a high priority on court lists to deal with Anti-Social tenants and what does it look like as to the evidence sought? We need answers to these questions.

Mediation can work if done properly at the early point in a dispute after the notice period. But there must be major resource put in to the court system to deal with the increase in Section 8 hearings and ensure there are enough judges and bailiffs (which at present there is a shortage). The abolishment cannot be rushed until we have the correct mechanisms in place.

I note in a recent press release from Shelter they quoted that 172 tenants are receiving Section 21 non-fault eviction notices per day. 

If that is the case, it would be interesting to see how many landlords are serving those Section 21 notices because they want to sell.  

Common reasons

On recent stats from my company, Landlord Action, the four most common reasons at present are landlords selling, rent arrears, anti-social behaviour and the tenants requesting the landlord evicts them so they can approach the council to be rehoused. 

My worry is when the date is set to end Section 21, which may be in 18-24 months’ time, that there will be landlord panic, as landlords rush to serve notices before the expiry date, as they feel they do not understand the changes or have confidence in the court system. 

Ultimately, evicting a tenant should always be a last resort, but for many landlords who have never had to apply to the court in the past, they are now doing it for the first time, as they want to sell and exit the sector.

It is right that landlords are ‘business-reviewing’ their portfolios as increased costs across the board are a challenge.

Look at the case of Ian Jackson. He has sold 40 of his 142-property portfolio in Belfast, Manchester and Scotland, 20 in the last 12 months. 

Good tenants

What does that mean?  It means that good tenants are being asked to leave, so those tenants will now have to battle it out with other applicant tenants, for far fewer properties and will undoubtedly have to pay more rent in a new property.

It goes back to what said at the start of this, be careful what you wish for. Without the pressures which have been put on landlords, Ian Jackson, and many others like him, might still be in the market.

Changes can happen but as I have said before, they need to protect tenants AND landlords, as both are required for a thriving PRS.

Plummeted

Here’s some stats for you.  In June 2019, there was 370,000 properties in the private rental sector, now we have 241,000.  Rental stock has plummeted by 35% in the last four years according to consultancy TwentyCi.

But let’s not be half glass full… despite these problems there are endless tenant applicants; the best choice of tenant pool; rents remain strong; and the lowest void periods than ever before.

So it’s not all bad. Landlords and letting agents have navigated the endless new rules and changes in the private rental sector since 2007, when Deposit Protection legislation was introduced, and I’m sure many will continue to do so.

View Full Article: ‘Stop demonising landlords, it’s just not helping the situation’