NEW: Activists urge landlords and agents to stop property ‘bidding wars’

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Tenants’ union Acorn has pledged to continue targeting letting agents in the city until they stop encouraging ‘bidding wars’ to help landlords achieve higher rents.

Members launched a noisy protest outside a number of branches; some agents which had started talks with Acorn about signing the pledge were left alone, but others were visited by Acorn reps who said they would follow up requests and repeat the protest until the agencies agreed to end the practice.

“We’re trying to stop letting agents pitting tenants against each other to force up the price of rents, driving loads of people out of the city, out of their homes that they’ve been in for years, and breaking apart communities, and this is something that is going on all the time – it’s affecting loads of our members,” Acorn organiser Ewan Maclennan (pictured) told the Bristol Post.

He explained that agents sometimes encouraged people to bid £50 or £100 higher to increase their chances of securing a property or gave out a formalised offer form to tenants.

“It’s almost part of the formal process for a lot of these letting agents,” added Maclennan.

Council motion

Earlier this month, Bristol City Council acknowledged the prevalence of bidding wars and their negative effect for renters, particularly low-income households.

It passed a motion backing calls for new rent controls in Bristol and promised to publish an annual living rent index, showing what affordable rents would look like in the city. A publicly accessible list will also show all enforcement notices issued to landlords while a new regular renters’ forum would engage with private tenants.

Read more about Bristol.

View Full Article: NEW: Activists urge landlords and agents to stop property ‘bidding wars’

Where are the most affordable places to rent?

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The current turmoil in the rental market shows no signs of slowing down with UK rents in the fourth quarter of 2022 hitting an all-time high, increasing 13% year-on-year, according to a new survey.

The flatshare site, SpareRoom

View Full Article: Where are the most affordable places to rent?

Shamplina webinar reveals biggest issues vexing landlords right now

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The most pressing questions on LandlordZONE readers’ minds were revealed during a recent webinar hosted by Chief Commercial Officer of the HFIS group, Paul Shamplina (main pic).

He joined forces with industry figure David Coughlin (main pic, inset) to help landlords identify the key steps to achieve the highest profits from their portfolios this year, but the pair were also inundated with questions from those watching.

Coughlin is the co-founder of the National Association of Property Buyers and director/founder of both National Residential and the Landlord Sales Agency.

This included the tricks of the trade when looking for the best mortgage particularly for first-time landlords; the practicalities of incorporating an existing property portfolio; the best heating systems for rented homes during the current energy price hike crisis; how to manage tenants who are struggling to pay their rent and what constitutes a ‘fair’ rent increase.

Shamplina and Coughlin were asked nearly 40 questions on these subjects both during and after the webinar, which was watched by hundreds of landlords.

One of the most frequent issues vexing landlords, the webinar revealed, is whether to operate existing or newly-purchased properties via a limited company umbrella. It’s a strategy that, although more time-consuming than personal ownership, is becoming more popular as a way to reduce a landlord’s tax bill and overall improve profitability. Learn more on limited company ownership of property and find out the pros and cons.

Check out the answers to some of your questions below:

Q: How would a first time buyer go about getting a buy to let mortgage? Are their any specialist mortgage providers?

A: Usually you would need a residential property mortgage before applying for a buy to let mortgage as lenders would like to see experience. Or you can buy your first property as residential and convert it to buy to let which is a good strategy for beginners

Q: What is your advice on increasing rent in the current climate? What would a fair increase percentage be?

A: You need to consider the market rent versus what they are paying. Advise your tenants what this is and that you need to agree on a rent increase closer to market rent for long term financial stability for yourself and their tenancy. Communicate and make it clear that with interest rates rising and future repair costs you cannot afford to run at a loss. Work with your tenants to come to an agreement and even offer to stagger the increase

Q: When incorporating properties how much stamp and capital gains tax needs to be paid?

A: This depends on whether you have commercial property in your portfolio and if you are running your rental portfolio as a partnership. You can pay 0% CGT if incorporating a partnership or pay 1% if it is a mixed residential-commercial portfolio. Alternatively, you may have to pay the full prevailing stamp that would apply

Q: Is it worth transferring a buy to let property into a company (that I own as a sole trader) for tax purposes?

A: For one property maybe not as the tax-costs benefits may be negligible. Incorporating is an expensive and complex business and the cheapest and simplest way for you would be purchasing from yourself in an SPV.  If you are intending to purchase more properties then it is advisable to set up an SPV for future purposes and maybe in time you can transfer this property

Q: As a basic rate tax payer with one HMO property in my name is it worth moving to limited company ownership? What might be the costs involved?

A: Firstly, add the rental income to your salary and if you stay in the basic rate bracket then there is nothing further to do. If you are pushed into a higher rate then consider purchasing the property from yourself in the limited company and benefit from the tax efficiency. It is worth considering you might also be able to increase your pension contributions to reduce salary and keep in line with the basic rate

Watch the webinar for free in full here.

View Full Article: Shamplina webinar reveals biggest issues vexing landlords right now

Disabled Tenant In DESPERATE Need of Good Advice

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I consider my landlord to be a perfect Gentleman and have been renting the same property for nearly 17 years without any issues whatsoever. That was until I received the letter below from him a few days ago. I don’t know how to respond or what my options are.

View Full Article: Disabled Tenant In DESPERATE Need of Good Advice

Revealed: The UK’s best buy-to-let areas

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Landlord insurance provider Simply Business has researched the buy-to-let areas that are most popular with landlords.

It says that London is still the best city for buy-to-let landlords for the second year running.

The firm says that more than 39,000 BTL insurance policies have been taken out in the capital.

View Full Article: Revealed: The UK’s best buy-to-let areas

Opinion: dealing with the thorny issue of damp and mould

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Damp and mould has always been a very difficult issue to deal with for landlords, but the recent case of Awaab Ishak and the rapid and direct involvement of Government has really brought matters to a head.

The death of a Rochdale social housing tenant’s son, Awaab Ishak, has led to a public outcry about black mould in housing, both socially rented and privately rented, and it’s prompted Michael Gove’s Department for Levelling Up, Housing and Communities to instigate a review of damp and mould guidance to landlords in the wake of this tragedy.

The outcome of the review, Michael Gove has said, will be added to the Social Housing Regulation Bill by way of an amendment, to be included as ‘Awaab’s Law’, a fundamental legal change being called for by campaigners to offer tenants more protection than they currently enjoy.

We will have to await the outcome of the review to find out what measures will be proposed and it will be interesting to see what solutions, if any, the review can come up with.

It will be little comfort to the parents of Awaab, whose death, it was found by an inquest, was a result of prolonged exposure to toxic mould growth in a Rochdale social housing flat being managed by Boroughwide Housing (RBH).

Housing charities such as Shelter fully expect that the review and Awaab’s Law will give more rights in law to tenants living in mould ridden homes, more rights and protections afforded tenants in a high profile Shelter campaign, This was conducted through the Manchester Evening News, in Shelter’s words, “make sure no other child, or anyone else, dies due to mould in their home”.

Damp and mould prevalent in rentals

The issue of mould in rental housing, and mould does seem a problem prevalent in rentals, it’s a thorny issue one for everyone involved, whether that be Government, the legal profession, property managers, landlords or tenants.

That’s because, when all is said and done, it boils down to who is responsible and who gets the blame? It’s very easy for Michael Gove to go round saying that we should not automatically point the finger at tenants over this, while implying that property owners / managers can suddenly do something to solve the problem overnight, implying that they are wholly responsible.

It seems to me that landlords will always point the finger at tenants when black mould appears, whereas tenants will blame the owner, or should I say the owner’s property. Clearly, legally the issue is such a grey area that blame can be apportioned either way, or somewhere in between the two, both parties may be partially to blame, therefore how do you determine that?

Traditionally lawyers have dealt with the matter in a fairly black and white fashion: if there’s a problem with the building’s structure, leaking walls, roof, rising damp or leaking pipes then clearly it’s the landlord’s problem.

On the other hand if none of these problems exist then legally it all boils down to the tenant, either because the property is not being adequately heated during cold weather or steam generated through cooking, washing or drying clothes, is not being properly vented to the outside, but rather allowed to condense on cold surfaces. Or just as likely, a combination of the two.

Unfit housing

But, there’s a half way house, excuse the pun, when a property, although free from the above defects, may be inadequate in other ways: insufficiently insulated or with a heating system that is ineffective or exorbitantly costly to run, or with insufficient means of adequately ventilating kitchens and bathrooms when this is required.

What a recent House of Commons Library paper titled Helping tenants with damp and mouldy housing (England), calls unfit housing would fit the description. Landlords have a statutory duty to provide their tenants with properties that are are “fit for human habitation” at the commencement and maintained throughout a tenancy.

One of the main categories of hazard in the Housing Health and Safety Rating System (HHSRS) used by local authority environmental housing inspectors (EHOs) is that the house is free from damp or fungal growth, both caused by dampness and/or high humidity and excess cold might amount to a category 1 hazard.

Inspections

Private and housing association tenants can contact their council and request an inspection by an EHO. Where an EHO identifies category 1 hazards under the HHSRS the council must then take action to ensure that the hazard is removed. This usually involves the landlord receiving an improvement notice and the council has further enforcement powers where landlords don’t comply.

In the case of social housing and with council tenants a house falling into this category creates something of an anomaly has the council in effect will be acting against itself.

Who decides?

The difficulty with damp and mould comes back to this thorny issue of establishing a cause and who is responsible. HHSRS may well be an objective process, a risk assessment system designed to standardise results, but then human nature intervenes.

A truly experienced EHO, private surveyor or damp specialist could be expected to pinpoint a cause and a remedy. But not all inspectors and surveyors are truly experienced in damp and mould in practice. What’s more, damp specialists often have a vested interest in finding work.

If it comes to a dispute, and thereby we get into a lot of expense, expert witnesses are needed to advise the legal representatives and judges of the facts, and of course then we get into an adversarial system.

Decent homes

The next stage in the government’s legislative programme on housing scheduled for this year is the introduction for the first time in the Private Rented Sector (PRS) is the Decent Homes Standard (DHS).

Introduced by the Labour Government in 1997, DHS was a standard designed for registered providers of social housing to meet. When recently under review it was concluded that the standard “remained broadly suitable and effective” but said an update would be beneficial.

Although full of good intentions on the part of the Government, the introduction of this additional layer of standards, at the end of the day, requires skill in correctly determining cause and effect and sensible solutions which are clear to all involved, if time consuming and expensive disputes are to be avoided.

Gove’s directive

The Secretary of State at the Department for Levelling Up, Housing and Communities, Michael Gove, wrote to all council leaders and social housing providers last November setting out his expectations relating to damp and mould.

He issued a direction under section 3(3) of the Housing Act 2004 which said all homes must meet the DHS and that those failing the test should have “rapid remedial works” carried out. In particular he highlighted the “thorny” issue of damp and mould.

Legal duty

There are now proposals to place a legal duty on private landlords to ensure properties meet the DHS. Local authorities would be tasked to investigate complaints. A breach will be a criminal offence which could incur a civil penalty or resulting in prosecution in the Magistrate’s Court.

The PRS housing stock consists of an overwhelming majority of older properties, properties that are less well equipped with good insulation, up-to-date heating systems and good means of ventilation. If these properties are to meet the proposed energy performance rating of EPC “C” by 2025 for new tenancies (2028 for existing tenancies) then a considerable amount of money will have to be spend on many of them (capped at £10,000) for these up-grades to be effective.

However, a housing stock brought up to full decent homes standard, and meeting EPC “C”, would solve a lot of the thorny issues surrounding damp and mould.

View Full Article: Opinion: dealing with the thorny issue of damp and mould

MOULD: Minister vows to speed up ‘Awaab’s Law’ as thousands sign petition

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The government has vowed to expedite a proposed law forcing landlords to respond quickly to complaints about damp and mould.

Housing minister Felicity Buchan (pictured) told MPs that proposals were being worked through, after it announced plans last week to tackle mould within the private and social housing sectors with updated guidance and initiatives.

It has also confirmed that the PRS’s new housing ombudsman would lead the battle against mould.

Housing Secretary Michael Gove and Secretary of State for Health and Social Care Steve Barclay said an amendment to the Social Housing Regulation Bill, relating to hazards in social homes, would be tabled, capturing the spirit of ‘Awaab’s Law’.

They also promised reform to make information on housing health and safety simpler for tenants and landlords, while addressing other concerns raised by the coroner following the death of toddler Awaab Ishak.

Complaints

In the Commons, Buchan said: “The proposed law aims to make sure that landlords respond to complaints about damp and mould quickly and with the proper regard to risk to health. We are working through the specific recommendations to consider how changes could be made as soon as possible.”

Meanwhile, a petition calling on the government to create Awaab’s Law has reached 171,000 signatures. Organised by the Manchester Evening News, it aims to prompt legislation that will prevent any more children dying from damp and mouldy social housing, after Awaab died while living in a mouldy and poorly ventilated flat that led to him suffering heart failure. 

His home was unfit for human habitation, but Rochdale Boroughwide Housing failed to rehome the family, despite their repeated requests.

View Full Article: MOULD: Minister vows to speed up ‘Awaab’s Law’ as thousands sign petition

Free Management Offer – Lettingsupermarket.com

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You might be forgiven for thinking that a 6% fee nationwide for full management would involve cutting corners.

You’d be wrong!

To celebrate 10 years of successful property management Lettingsupermarket.com™ is offering 3 months of free management if you sign up with us by 31st March 2023.

View Full Article: Free Management Offer – Lettingsupermarket.com

RENT RISE: Landlord pushes back against tenant’s public complaint

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A landlord has spoken out to defend a substantial rent increase after its tenant complained about his eviction to the local newspaper.

Richard Symonds told Sussex World that he was “shocked, angry and anxious” to be told of a £275-a-month increase on the property in Ifield Street, Crawley, which he couldn’t pay. He added: “This outrageous demand is causing me distress and adversely affecting my health.”

The property was first rented by Richard’s late mother and he moved in to become her carer after she had a fall. He has now been served an eviction notice and told the newspaper: “I’m shocked by the sheer scale of it.”

Sympathetic

But the landlord said that while it was sympathetic, it had kept the rent at an affordable price for the former elderly tenant, Mr Symond’s mother, for years as a goodwill gesture.

When she died in November 2019, he took over the tenancy at the same rental price – subsidised by Crawley Council until March 2021, which then reduced his monthly housing benefit payment by £250.

“Mr Symonds was worried about falling into debt and potentially having to leave the property,” said the landlord. “As a kindness, we agreed to reduce the rent to £825, allowing him to remain in the property and also to reduce the financial strain.

As it stands, this rental figure is well below market value, with similar properties achieving in excess of £1,200 pcm. Regrettably, this rental figure is not sustainable and even with the proposed increase, the rent would still be below market value.”

Read advice about rent rises.

View Full Article: RENT RISE: Landlord pushes back against tenant’s public complaint

NEW: Shelter says landlords ‘still rejecting tenants based on race’

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The boss of housing charity Shelter has repeated the organisation’s previous assertion that tenants seeking properties in the private rented sector (PRS) too often face racism from both landlords and letting agents.

Polly Neate’s comments have been published by the BBC within a report on its news website which includes several case studies of black house hunters looking for rooms or properties to rent in the UK.

Neate has told the BBC that Shelter’s advice lines have been supporting tenants who have been turned away by landlords due to their race, and is calling on the Government to deliver on proposals to strengthen protections for private renters within the Renters’ Reform Bill.

Regulation

“A lack of regulation means landlords and letting agents are getting away with discriminating against people of colour who feel powerless to challenge them,” she says.

The BBC report also features Jabeer Butt, CEO of the Race Equality Foundation, who says budget cuts have severely reduced the ability of organisations such as local authorities and the Equality and Human Rights Commission to police discrimination within the PRS.

He also points the finger at the Right to Rent scheme, which requires landlords under threat of huge fines to do the vetting work of the Home Office’s Border Force to complete immigration checks on new tenants.

Power

“[This has] created an environment where landlords have much more power about who they choose to rent to,” he says.

“I can’t help but think that discrimination will be part and parcel of that.”

An NRLA report into the Right to Rent scheme a year after it was introduced in 2016 repeated claims by the JCWI that the scheme had  the “potential to cause discrimination”.

Separate NRLA research shows that 44% of landlords reported they are less likely to consider letting to individuals without a British passport.

“This is likely to lock vulnerable individuals out of accessing a home in the private rented sector, especially as at the last census 17% of the population of England and Wales reported they did not have a passport,” it revealed.

Latest on the Right to Rent rules.

View Full Article: NEW: Shelter says landlords ‘still rejecting tenants based on race’