Competition regulator reveals concerns over Birmingham’s BTR market

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The Competition and Markets Authority has allowed a merger to go through within the build-to-rent market, but its investigation has revealed the hugely international nature of investment in student accommodation in the UK, and its worries over competition.

Since September the CMA has been looking at the proposed take-over of PBSA firm the Student Roost Group by behemoth US firm Greystar and GIC, which is owned by the Singaporean government.

Student Roost is a provider of student accommodation across the UK including in Birmingham and Glasgow, and is currently owned by Brookfield Asset Management, Inc

The CMA has allowed the merger/acquisition to go ahead but has given Greystar and GIC five says to come up with a plan to solve the CMA’s concerns over competition within Birmingham.

Less competition

These are that the merger gives rise to a realistic prospect of a “substantial lessening of competition (SLC) as a result of horizontal unilateral effects in the provision of purpose-built student accommodation in a number of local areas in Birmingham”, the CMA says.

If the CMA’s worries can be assuaged, then the deal will go ahead because, nationally, the regulator found no competition concerns because the combined organisation would have a “relatively modest” share of supply (10-20%) and would continue to face strong competition from other corporate purpose-built student accommodation providers such as Unite, Homes for Students, iQ and This is Fresh.

Colin Raftery (pictured), Senior Mergers Director at the CMA, says: “Aside from fees, rent is the biggest expense students face, and the rising cost of living is putting even more pressure on student budgets.

“Many university towns and cities are already dealing with a student accommodation shortage, which is why it’s crucial that private providers like those involved in this deal are competing effectively.

“We’re concerned this deal could result in students in Birmingham seeing higher prices or lower quality services.

“GIC, Greystar, and Student Roost have accepted our concerns and have told us that they plan address them. A solution that fully resolves our concerns will avoid the need for a more in-depth investigation.”

Read more about BTR.

View Full Article: Competition regulator reveals concerns over Birmingham’s BTR market

Landlord survey: who’s staying in, and who’s selling up

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Full-time private landlords are most likely to be thinking about increasing their portfolio, according to a new report, while accidental landlords are more likely to be without a short-term plan.

The UK Collaborative Centre for Housing Evidence’s survey of 1,000 landlords reveals that those who entered the sector for personal financial reasons, such as their property was in negative equity and they couldn’t sell it, were the largest group planning to sell up.

However, its report – Understanding landlord behaviour in the PRS – found one in five full-time landlords were also planning on quitting.

Instil confidence

In England, landlords believe the need for improved enforcement to tackle criminal landlords who tarnish the sector’s reputation is most needed to instil confidence.

Swifter judicial procedures for the termination of contracts and improvements in eviction proceedings, along with more rights for landlords, particularly in relation to rent arrears and damage to properties, were also called for.

Reforms

Across the UK, landlords took different stances on the government’s proposals for reform. Those that relate to improvements in the physical condition of properties such as the introduction of minimum standards (England and Scotland), electrical/gas safety (Northern Ireland), and the introduction of a central regulator (Scotland) – were generally positively received.

Those reforms strengthening tenants’ position – increasing tenure security or notice periods and rent controls – were viewed less favourably.

The report adds that given the frequency with which landlords suggested improving enforcement measures to bring about change, it was surprising that only half of those surveyed thought strengthening local authority enforcement powers would have a positive impact.

Read more: Housing laws not fit for purpose.

View Full Article: Landlord survey: who’s staying in, and who’s selling up

Property expert predicts further house price falls

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Data from Halifax this week shows that the UK’s house prices fell at the sharpest pace in almost two years last month as rising mortgage rates and a gloomy economic outlook took their toll.

The figures show that house prices fell 0.4% in October – the third decline in four months.

View Full Article: Property expert predicts further house price falls

Tenant Welcome Pack – Help relationships get off to a great start

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A tenant welcome pack can help your tenant relationships get off to a great start.

Have you ever had a tenant contact you with unreasonable or minor requests that then escalate into much bigger issues, or just create tension between you?

View Full Article: Tenant Welcome Pack – Help relationships get off to a great start

More than a quarter of landlords want to sell – claim

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More than a quarter of landlords are planning to sell their rental properties because of the current buy to let environment, mortgage brokers say.

The research comes from broker forum, cherryplc.co.uk, which found that 28% of landlord clients are planning to sell properties

View Full Article: More than a quarter of landlords want to sell – claim

Minister reveals more details of looming PRS reforms during scrutiny session

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The government has vowed that the court process for possessions will be efficient and swift when it refines the much-expected PRS reforms.

Giving evidence to the Levelling Up, Housing and Communities committee on its White Paper, newbie Housing Minister Felicity Buchan (pictured) said it was working on proper guidance around dealing with anti-social behaviour that included local authorities and the police.

“We need to be in a position when someone’s committing ASB there’s an efficient way to remove them,” she said.

“We’re working with the judiciary and the Ministry of Justice to introduce reforms to make the possession process as efficient as it can be for landlords while protecting tenants’ rights.”

Housing court dismissed

While dismissing the idea of a housing court, she insisted that mediation would be a sensible route to follow, despite many of the MPs on the committee questioning whether this would be appropriate when dealing with potentially greater numbers of tenants challenging rent rises at tribunals, putting more strain on the courts.

On the proposed property portal, Buchan said there would be a small registration fee, while Charlotte Spencer, DLUHC director PRS and leasehold, revealed that it didn’t expect local authorities to inspect every single property.

“We would probably be relying on a degree of self-certification, then a random sample of inspections,” she said.

Selective armoury

Spencer added that selective licensing would still be needed as part of the tools in local authorities’ armoury but that it was keen to minimise requirements for duplication in the portal.

Committee chairman Clive Betts (pictured) said it was very sceptical that the justice system would deliver on the department’s intentions and challenged the minister over why affordability wasn’t addressed in the White Paper.

He also asked when the Bill was likely to be introduced. Buchan again dodged the question but insisted: “It’s a key priority of government – there’s a desire to get on with it.”

The committee’s report will be published early in the new year.

Watch the session in full.

View Full Article: Minister reveals more details of looming PRS reforms during scrutiny session

Leading landlords warn Government’s over periodic tenancy plans

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Landlords in Cornwall have warned that students will suffer a shrinking pool of accommodation unless the government allows them to have 10 or 12-month tenancy agreements.

In its response to the government’s White Paper on fairer renting, Cornwall Residential Landlords Association says a change to two-month periodic tenancies will leave them uncertain whether tenants will actually vacate.

Chairman Ruth Clarke (pictured) explains that the cost of halls of residence attached to colleges and universities are frequently more than equivalent properties in the private rented sector.

“Making tenancies more difficult may force landlords to leave this specialist market, discriminating against the vulnerable and those from ethnic minorities who may be less likely to be able to afford to continue with their education,” she says.

The group adds that tenants fear the proposed changes will leave them less secure, especially those who have transgressed in the past and have had to leave their home or face the costs of court fees when the landlord obtained a possession order.

Read more about the white paper.

Clarke tells the inquiry that when a landlord can’t obtain possession in time for new students to move into a property at the beginning of the academic year, they could switch to either letting to family groups or holiday lets.

“There is currently not an option for a landlord to revert back to the shared occupation without first obtaining fresh Article 4 planning permission,” she adds.

“We ask that conditions surrounding Article 4 be reviewed and flexibility be built into the planning system.”

Other landlord groups have previously warned that students will pay higher rents as landlords exit the sector if the proposal is introduced. This has already happened in Scotland where similar rules were brought in recently.

View Full Article: Leading landlords warn Government’s over periodic tenancy plans

Immigrant requirements to rent?

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Hello, Apologies for this rambling query.

Background: My daughter has landed a permanent job at Cambridge University and is about to immigrate to the UK (we are South African). She is a director and shareholder of our small BTL company registered in the UK.

View Full Article: Immigrant requirements to rent?

NEW: More students failing referencing as cost-of-living crisis hits sector

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The number of students who passed referencing dropped from 50% to 40% this autumn and is likely to fall even further, due partly to the growing cost-of-living crisis, according to a leading rent guarantee firm.

As demand for university places and a lack of suitable homes puts the student accommodation sector under intense pressure, it reports that the tsunami of students meant many needed last-minute support to find somewhere to live.

“Given the current economic pressures, a higher number of applicants are failing referencing and require a suitable guarantor to progress their rental arrangements,” says Graham Hayward, chief operating officer of Housing Hand.

He adds that the number of UK students applying for rental guarantors has almost matched the number applying from overseas. However, of those international students, a higher proportion was from outside Europe as the impact of Brexit makes itself felt.

Accommodation providers have stepped up to help students find places, reports Housing Hand, which has seen a 25% rise in custom arrangements across purpose-built student accommodation, build-to-rent homes and HMOs.

Lack of supply

“Many universities are seeking ways to support their students, particularly where a lack of supply in the local accommodation market may exclude many if they were required to pay full accommodation costs up front,” says James Maguire (pictured), its head of sales and business development.

“Additionally, universities are now seeking the inclusion of their own halls of residence in bespoke rental guarantor arrangements with Housing Hand to help level the playing field for those who would otherwise struggle to find an affordable home.”

View Full Article: NEW: More students failing referencing as cost-of-living crisis hits sector

House prices continue to fall as market cools

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The average house price in the UK fell by -0.4% in October – the third price drop in four months, Halifax data reveals.

Prices fell by -0.1% in September and the annual rate of growth has now fallen to +8.3%

View Full Article: House prices continue to fall as market cools