PROBE: Landlords complain about rent-to-rent firm as deals go sour

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Complaints from landlords and letting agents have been passed to LandlordZONE about a rent-to-rent provider whose founder is lauded online for raking in up to £12,000 a month.

Merleen Gocan (pictured) is a director of the Good Living Group (GLG) and, along with business partner Sammy Hills has in the past boasted of turning over £350,000 from rent-to-rents in a year.

But the company has been ordered by the Property Redress Scheme (PRS) to repay thousands of pounds to two investors and has two more complaints pending.

However, Gocan denies all allegations and says the PRS claims are being disputed.

Nicole Barratt-Rae, MD of Barratt Sales and Lettings in Windsor, says one of her landlords is owed £5,000 in rent after a deal turned sour.

“I manage a block of six flats for a landlord who unwittingly signed up to GLG as part of a rent-to-rent deal, which then turned them into serviced accommodation,” she tells LandlordZONE.

“When the firm stopped paying him rent in July, GLG told us we would be illegally evicting the tenants if we tried to take the properties back.

Luckily, they were empty, the keys had been left in the key safe for all flats and the landlord had put a one-year break clause into his three-year management agreement.”

Ignored

Propertymark member Barratt-Rae adds that Gocan did not have the right to manage the property due to non-payment of rent as laid out in the tenancy agreement. “This was brought to her attention many times and she chose to ignore it.”

Barratt-Rae claims six other people she knows of have had bad experiences including a landlord who paid GLG for furniture that didn’t exist, and then received complaints about his property via Booking.com.

The PRS has recently compensated one landlord £22,628 after he funded repairs and paid rent on the basis that his property was going to be converted into an HMO – but Good Living Group failed to get a HMO licence and did not make the property comply with any legal requirements.

Contested

In another case, the PRS ordered that a finders’ fee of £6,300 was paid back after the investor decided not to go ahead with a deal – which Good Living Group contested.

Merleen Gocan tells LandlordZONE that in the case of the block of flats, GLG kept the rental payment up-to-date for the contract and accuses Barratt Lettings of breaching the agreement and illegally evicting tenants.

She says: “The £5,000 in question is the last four weeks’ rent when she changed the locks during that period. I have an email trail, text communication and video evidence of the full situation. Landlords should be made aware that this agent takes things into her own hands and acts illegally. The six other landlords’ claims [mentioned above] is fake.”

Gocan adds that Hills is not a director of the company and was consulting with her on that particular deal.

LandlordZONE has approached Sammy Hill for comment.

View Full Article: PROBE: Landlords complain about rent-to-rent firm as deals go sour

BLOG: Problem with rent controls is our costs cannot be… controlled!

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The problem with rent controls is that landlord costs cannot be controlled. For example, insurance, service charges, repairs and interest rates are all going up at a faster rate than rents.

Landlords’ margins have already significantly shrunk due to all the new regulation and tax changes, so if rents are capped then there will be even less money available to do repairs and maintenance, meaning a lower standard of accommodation.

Or worse still, more landlords will sell up meaning less properties available which will put further pressure on the already huge supply problem.

If rents are to be capped or controlled in other ways then there need to be incentives for landlords to keep them in the market such as tax credits, guaranteed rent payments by the government for defaults, no council tax for empty properties and lowering the tax rates on profits.

Mortgage costs

One example I have is one of my BTL mortgages has gone up from £289 to £624 per month since December last year but I have only been able to increase the rent by £50 as of this month. And the mortgage will be going up again next month when the new rate kicks in.

My other costs such as insurance and service charges have also gone up over £1000 this year.

This is a common story that I am hearing from our landlords too. Everyone is very concerned about interest rates and the impact to everyone.

Author BIO: Richard Jackson (main picture) is founder and CEO of landlord platform Alphaletz.

View Full Article: BLOG: Problem with rent controls is our costs cannot be… controlled!

Interest rates have gone up but Landlords don’t need to panic

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Landlords have been under a lot of pressure recently, with interest rates going up, house prices dropping, and changes in government, anxiety levels have been at an all-time high. However, despite the current state of affairs, we still have options to help us get through this patch without panicking.

View Full Article: Interest rates have gone up but Landlords don’t need to panic

NEW: Brighton squeezes HMO sector even harder with new policies and guidance

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Brighton & Hove Council is squeezing its HMO sector even harder by introducing a tough new set of policies designed to reduce their impact on local communities.

Its City Plan Part 2 includes new guidance for those applying for planning permission as well as rules covering buying and selling HMOs.

An Article 4 direction already means that landlords need planning permission to change a house to an HMO everywhere within the city, where there are about 5,000 licensed HMOs.

The new guidance relates to both new-build HMO planning applications and changes of use to or from a single-family home to an HMO.

Applications will now only be considered where all the following criteria are met:

• fewer than 20% of dwellings in the wider neighbourhood area are already in use as HMOs;
• the proposal does not lead to three or more HMOs immediately next to each other or in a non-HMO house being sandwiched between two HMOs;
• space standards and cooking and bathroom facilities are appropriate in size to the expected number of occupants.

In future, landlords will be able to buy an existing small HMO and use it as a single-family dwelling without planning permission for a change of use, however if they buy a larger HMO that has housed six or more people to use as a single-family dwelling, they or the vendor will need to apply to the council for change of use.

Read more: Complete guide to renting an HMO property.

Councillor David Gibson (pictured), co-chair of the housing committee, says: “City Plan Part 2 sets out better management of the supply of Houses in Multiple Occupation. I am pleased to say that City Plan Part 1 and its restrictions on HMOs have had a very noticeable impact, and this will be strengthened by the newly introduced policies in City Plan Part 2.”

Read the new Brighton guidance in full.

View Full Article: NEW: Brighton squeezes HMO sector even harder with new policies and guidance

LATEST: Government has ‘broken the PRS’ during its war on landlords

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Landlords have accused the Government of “breaking the private rented sector” with its relentless regulatory and tax policies.

The comments have been made by the NRLA, which says that while demand for rented homes is rising as home ownership becomes less affordable, the number of properties in the market continues to dwindle.

Successive Conservative governments have set out on a “deliberate effort to discourage investment in the private rented housing” for over seven years now, it claims.

This includes measures to restrict mortgage interest relief and imposing a three per cent stamp duty levy on the purchase of homes to rent out, and a looming Capital Gains Tax expected in Chancellor Jeremy Hunt’s Autumn Statement tomorrow.

“The Government’s strategy for the private rented sector lies in tatters,” says Ben Beadle, Chief Executive of the NRLA.

“The fact that the supply of homes to rent is falling despite an increase in demand is a damning indictment of tax decisions which serve only to increase rents and make home ownership more difficult to achieve.

“Further tax hikes on the sector risk making an already bad situation worse. Ministers need to recognise that a healthy and vibrant private rental market needs to sit alongside, rather than be in competition with, efforts to support homeownership.”

250k drop

Official ONS figures show that the number of households in the private rented sector has fallen by over a quarter of a million over the past five years while demand from prospective tenants has soared – up by 142 per cent now compared to the five-year average, according to Zoopla.

And the demand for rental housing is set to grow further as mortgages become more expensive, the NRLA is warning that further tax hikes will serve only to “exacerbate the crisis facing many tenants trying to find housing”. 

Read more: What the renting reforms mean for landlords.

View Full Article: LATEST: Government has ‘broken the PRS’ during its war on landlords

Inventories ‘key tool’ for landlords seeking to comply with looming rent reforms

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Inventories will be key to easing the sector’s fears when England’s rent reform proposals become law, says No Letting Go CEO, Nick Lyons (pictured).

He believes that everyone wants decent homes in the PRS as well as a level playing field for letting agents and tenants.

“This is best achieved through transparency at the outset of a tenancy agreement, regular monitoring throughout its duration and a thorough, detailed inspection when the term comes to an end,” explains Lyons.

He says the Renters’ Reform Bill proposals take what is already best practice and make it a legal requirement.

“Reputable letting agents already operate at a level which is not threatened by these measures, but as an industry, letting agents and those servicing the sector must make sure that they are meticulous in all aspects of their operations”, he says.

Spot on?

Lyons adds that 80% private rented homes already achieve or surpass the Decent Homes Standard and while there are adequate protections in existence, it is important to ensure that protocols and compliance are spot on.

“This is the last line of defence,” he says. “Critical to that is the preparation of a professionally prepared inventory – agreed and signed off by both parties – to underpin every tenancy agreement and reassure agents and landlords that their properties are valued as homes and treated with due care and respect for the duration of the letting term.”

View Full Article: Inventories ‘key tool’ for landlords seeking to comply with looming rent reforms

NRLA proposal on anti-social behaviour accepted by the Government

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The Government has accepted a proposal from the National Residential Landlords Association (NRLA) to tackle anti-social tenants who cause misery for neighbours and fellow tenants alike.

Felicity Buchan, the minister for the Private Rented Sector, says that the Government’s ambition is to strengthen the grounds enabling landlords to tackle anti-social behaviour when Section 21 repossessions are scrapped.

View Full Article: NRLA proposal on anti-social behaviour accepted by the Government

The UK’s house prices stall – but rents rise

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The UK’s average house price increased by 9.5% over the year to September, down from 13.1% in August, data from the Office for National Statistics (ONS) reveals.

The latest house price index shows the annual percentage change slowed because house prices rose sharply in September 2021

View Full Article: The UK’s house prices stall – but rents rise

BREAKING: Minister says Government will ‘never allow rent controls in England’

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Newly-installed PRS housing minister Felicity Buchan has told a meeting of landlords that her Government would never bring in rent controls.

Her comments came during the NRLA’s annual conference in Coventry during which she also committed to ‘stick around’ and made several comical allusions to the short tenures of previous housing ministers.

Buchan also said the Government accepted the NRLA’s proposal to tackle anti-social behaviour by tenants.

This includes convening a meeting of key stakeholders representing landlords, tenants, the police, local authorities and others to develop plans to ensure swift and effective action can be taken against tenants who behave badly.

But the Minister confirmed that Section 21 would be going and counselled the sector to get ready for the eventuality, outlined the Government’s commitment to ensure its plans to reform the private rented sector work for responsible landlords as well as tenants and said she understood concerns about the impact its plans could have on the student housing market.

Likewise, she made clear the importance of the court system working “properly and efficiently” when Section 21 is abolished.

Confidence

Ben Beadle (pictured), Chief Executive of the NRLA, says: “We welcome the Minister’s comments and agree that the Government’s rental reform plans need to enjoy the confidence of both responsible landlords and tenants.

“The NRLA has made clear that more needs to be done to ensure the behaviour of anti-social tenants can be tackled effectively when Section 21 goes.

“We therefore welcome the Minister’s acceptance of our proposal for a roundtable on the issue.

“It is vital that all key stakeholders representing landlords, tenants, the police and others can develop clear and workable plans to ensure neighbours and fellow tenants alike are not left at the mercy of nightmare tenants.”

Pic credit: NRLA

Read more: What will happen after section 21 goes? 

View Full Article: BREAKING: Minister says Government will ‘never allow rent controls in England’

London’s rental prices reach record high weekly price

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New figures show that London’s rent prices have reached record highs, as rising interest rates and lack of supply put pressure on rents, Foxtons reports.

In October, rents reached a new record high of £571 per week, exceeding the previous high of £553 per week in September 2022.

View Full Article: London’s rental prices reach record high weekly price