EXCLUSIVE: Landlord wins £11k after judge rules on rent guarantee ‘Covid clause’

admin    Uncategorized     agents

A student landlord has won its court case against rent guarantee firm Housing Hand for issuing a pandemic exclusion clause to exempt tenants from paying their rent due to Covid.

The London firm successfully claimed back nearly £11,000 that it lost in rent arrears during the nine months the clause was in place and believes there may be many other landlords and agents who used Housing Hand as a guarantor during the pandemic but who have written off the debt.

In September 2020, Housing Hand told LandlordZONE that it had contacted 2,000 landlords and agents about accepting ‘Covid clauses’ and that 95% had agreed ‘reluctantly’ to accept them.

A judge at the London County Court (pictured) ruled that as the landlord’s agent had signed the pandemic exclusion agreement, it could enforce the guarantee against Housing Hand because the landlord itself had never agreed to the clause.

In addition, she ruled that if there was already an entire agreement clause – which in this case there was – this supersedes any pandemic exclusion clause.

The successful landlord tells LandlordZONE: “It was unfair that Housing Hand used the agreement to wiggle out of paying.

Claim call

“There may be other landlords out there who can claim against Housing Hand despite their agent having signed the pandemic exclusion clause and probably telling them that the money is unrecoverable. These landlords may now be missing out on rent legally due from Housing Hand.”

Housing Hand says the case was quite unusual as the rent arrears related to a property that had been sold mid-tenancy.

A spokesman says: “The position of the court was that the obligation on us as the guarantor would automatically transfer to the new owners, but the pandemic variation would not – and naturally we respect that decision.”

He adds: “Throughout the academic year of 2020-21 we promptly paid out to affected landlords and are working on corresponding sympathetic repayment plans with most of the tenants in question given the effects of the pandemic. The pandemic variation has been applicable in less than 3% of all claims that we have received throughout that academic year.”

View Full Article: EXCLUSIVE: Landlord wins £11k after judge rules on rent guarantee ‘Covid clause’

Landlords chase higher-yield properties as mortgage and maintenance costs rise

admin    Uncategorized     agents

A record 73% of new buy-to-let purchases earnt gross yields above 5% this year, up from 63% in 2016, reports Hamptons.

Its Monthly Lettings Index reveals that 23% earnt yields of 8% or above – largely helped by a move away from the capital; a fifth (20%) of London investors have bought properties in the North of England, up from 9% in 2016 and just 1% a decade ago. 

It’s hardly surprising, as London – which has an average gross yield of 4.9% – offers the weakest returns of any region in England and Wales, in stark contrast to the average 7.4% yield in the North of England, outpacing the 6.1% average.

Two-thirds (66%) of London-based investors bought properties outside the capital this year, up from just 26% a decade ago, while 29% of all properties bought as a buy-to-let are now in the North West, North East or Yorkshire & Humber, three times the figure 10 years ago. 

Base rate losses

However, the agent warns that an average higher-rate taxpaying investor with a typical 75% LTV mortgage is likely to start making a loss if the base rate reaches 2.5%.

They’ll need to yield at least 7% to stay out of the red – a figure only achievable in about 23% of local authorities in England and Wales, 65% of which are in the north of England.

Since August 2021, the average rate has risen from 1.79% to 3.51%, meaning that a landlord who bought a £222,000 buy-to-let last year will likely see their annual interest-only mortgage payments nearly double from £3,010 to £5,903 if they re-mortgaged last month. 

If the 0.5% base rate rise to 2.25% is fully passed on, this will increase payments to £6,743 for a re-mortgaging investor. As a result, net annual profit made by a higher-rate taxpaying investor who earns an average yield of 6.1% could fall from £3,198 in August 2021 to £212.

Read more: How to get the best mortgage deal.

View Full Article: Landlords chase higher-yield properties as mortgage and maintenance costs rise

How to contact uncontactable tenants?

admin    Uncategorized     agents

Hi,

Has anyone experienced a situation where you can’t get hold of the tenants?

I’ve been trying to contact my tenants to arrange access for a surveyor to do a valuation, but there’s been no response whatsoever from both tenants.

View Full Article: How to contact uncontactable tenants?

Warning issued as plans to abolish S21 evictions and fixed-term tenancies proceed

admin    Uncategorized     agents

A group representing the entire PRS has given a strong warning to the Government that its ‘Fairer Renting’ white paper proposals need a significant rethink.

The Lettings Industry Council (TLIC) includes representatives from the NRLA, 30+ leading national letting agents, surveyors, property managers, redress and deposit protection schemes and consumer groups including Generation Rent and Which?.

Its new report is designed to set alarm bells ringing in Whitehall, highlighting how official plans to both abolish Section 21 evictions and replace fixed-term tenancies with periodic ones will “negatively impact shared households, lead to significant job losses in the sector and prejudice applicants who require a guarantor”.

TLIC instead says that if Section 21 evictions are to go, fixed-term tenancies must remain, pointing out that the Welsh Government U-turned on its periodic tenancy plans recently.

The report also warns that unless its proposal is adopted, even more landlords will quit the sector making the current problems with rental stock even worse.

And as LandlordZONE reported exclusively last month, student landlords in particular are horrified by the proposal to switch all tenancies to periodic given the way student rentals work.

Paul Shamplina, founder of Landlord Action and Chief Commercial Officer at Hamilton Fraser, who has been working closely with TLIC to find workable solutions to the abolition of Section 21, adds: “Landlords need to have quick and simple routes for gaining possession of their property, and the courts need to improve to facilitate this.

“In addition, without bailiff reform, enforcement will be even more challenging. We believe the suggestions in this report help strike a better balance between the need to give tenants more security and offering landlords greater confidence in the system.”

Theresa Wallace, (main pic) Chair of TLIC, says: “It is vital to maintain the supply of desperately needed properties to rent, to prevent a further rise in homelessness and living costs which will inevitably affect the most vulnerable tenants on the lowest incomes.

“Although it is growing, the Build to Rent (B2R) sector predominantly provides one and two bed apartments but it is family homes that the PRS has a severe shortage of. B2R is not currently the solution to filling this gap.

Exiting landlords

“We are calling for any changes to the PRS to be very carefully considered and thorough impact assessments conducted, so as to ensure that the proposed changes do not cause more landlords to exit the sector at a point where property is so desperately needed by tenants.”

But her report also urges Ministers to consider improving the way the PRS works including the courts, council tax payments, the proposed Decent Homes Standard, enforcement of rogue landlords, how the landlord ombudsman and property portal will work, how selective and additional licence schemes can be improved.

TLIC is also calling for landlords and agents to given more time to adjust to the Renters Reform Bill, which is expected next year.

You can read the full report HERE

View Full Article: Warning issued as plans to abolish S21 evictions and fixed-term tenancies proceed

Can tenants take in Ukrainian refugees?

admin    Uncategorized     agents

Hi, I am a letting agent and an unrelated landlord has asked for some advice, his tenants (a couple) have moved in Ukrainian refugees into the rented property without his permission or discussion etc. and they are receiving £350 for this.

View Full Article: Can tenants take in Ukrainian refugees?

Labour ‘demonises landlords’ and will empower tenants

admin    Uncategorized     agents

Labour has unveiled plans to deliver a new renters’ charter and a decent homes standard for the country’s private rental sector.

But the criticism at the party’s conference in Liverpool of private landlords has been slammed by one organisation as ‘demonising all landlords’.

View Full Article: Labour ‘demonises landlords’ and will empower tenants

Landlords worry they can’t afford green property upgrades amid rising costs

admin    Uncategorized     agents

Rising costs are piling the pressure on private landlords who say they can’t afford to implement the measures needed to improve their rental property’s EPC rating, a bank says.

The Secure Trust Bank has found that investors and landlords fear that they will not hit the government’s proposed energy efficiency targets for their rental homes.

View Full Article: Landlords worry they can’t afford green property upgrades amid rising costs

Comment: what’s really behind the surge in no-fault evictions?

admin    Uncategorized     agents

A report in The Guardian newspaper says that the “Surge in ‘no-fault evictions’ prompts calls to renew UK-wide ban,” on section 21 evictions that is, as was the case during the Covid pandemic.

Tenants were protected from being removed during lockdown – however much they may have been in arrears – but tenants are now suffering “devastating consequences,” the paper says.

What the article fails to recognise is that the very threat of the removal of section 21 no-fault evictions, along with other prosed quite radical measures, has put the fear of God into many landlords, and consequently they are using the very mechanism which is under threat to remove tenants, so they can sell up.

Long-running campaign to remove section 21

Housing activists and homelessness charities have long complained about no-fault eviction notices being used to remove tenants who complain to their landlords about the property conditions and the need for repairs, the so called “revenge evictions”.

But landlords and eviction specialists such as Landlord Action have provided much evidence to show that these revenge evictions are a tiny minority of the whole and that most evictions are simply due to rent arrears and bad tenant behaviour – after all the vast majority of landlords want to keep good tenants as long as possible.

But this does not stop the outcry, even from people august as former head of the civil service, Sir Bob Kerslake, warning of a “catastrophic” homelessness crisis unless the government re-introduces the eviction ban on evictions that protected tenants during the Covid-19 pandemic.

An end to Section 21

The Conservative government promised to end the practice of no-fault evictions over two years ago and this is due to become law at sometime in the near future under the auspices of the Renters’ Reform Bill. This Bill and its radical overhaul of the Private Rented Sector in England is set out in the white paper, A fairer private rented sector but it has yet to pass into legislation, not likely before well into next year.

The proposed new reforming legislation, largely formulated under Michael Gove – at The Department for Levelling Up, Housing and Communities – who has now left the government, includes some sweeping reforms such as no fixed-term tenancies, restrictions on rent increases and longer notice periods, increasing tenants powers to challenge evictions, no bans on pets, DSS and families etc.

The pendulum appears to be swinging, shifting the balance of power away from landlords and too much into the hands of their tenants. What is frightening many landlords, giving them nightmares that they could be stuck with bad tenants, is that they may be unable to remove them indefinitely.

Strengthening eviction grounds

Yes, along with these new proposals go promises to strengthen the grounds on which landlords can seek redress when things go wrong. Given good responsible tenants the new rules would probably make very little difference, and after all most landlords would like to see their tenants staying indefinitely and most tenants leave amicably when the decide to do so. But when things go wrong its a different matter: arguing the landlords’ case in an English court of law’s adversarial system, to remove a really bad tenant, without the certainty of s21, can become protracted and very expensive.

That’s if the landlord can get the case to court in the first place. Given the current backlog of cases and the slow pace that these things progress, landlords have little faith that the promised improvements in dealing with bad tenants will ensue. What’s more, if all these cases must in future must go to a court hearing, rather than just a paper exercise, even more delays will be created – it could be chaos!

Landlord flight

The resulting landlord flight from buy-to-let is without doubt causing chaos as The Guardian article says, though it fails to mention that the threat of removing s21 is in any way a responsible, simply blaming instead the backlog of cases created by the Covid ban:

“The more than doubling in homelessness from no-fault evictions is largely down to the fact that landlords were prevented from using the eviction system for much of the pandemic as the government successfully moved to prevent a surge in homelessness, including its “everyone in” strategy on rough sleeping. But the latest figures show no-fault evictions are now causing more homelessness than in 2018/19 and 2019/20.”

Matt Downie, chief executive of homelessness charity Crisis told The Guardian:

“The prime minister must commit to introducing the renters reform bill, to help give renters proper protection from being hit with a no-fault eviction and set out a clear plan to provide genuinely affordable homes. Only through such decisive action can thousands more people be protected from homelessness in the coming months.”

A crisis situation in housing

When letting agents are resorting to sealed bid for tenancies, and bidding wars that are driving would-be tenants crazy are in evidence across the country, it underscores the plight that people are going through, desperate for good quality rental accommodation at a reasonable price.

The big sell-off is not only creating this massive problem at the middle and top end of the rental market, its exacerbating the eviction problem at the bottom end, resulting in a homelessness crisis.

The shortage of housing is seeing tenants queuing in the streets for a viewing at one end of the spectrum, and rents are being pushed up, by as much as 19 per cent over last year, while at the same time tenants are being thrown out onto the streets. It just does not make sense to me!

Some agents are even asking for tenant CVs to evaluate their applicants backgrounds as if applying for a job, before agreeing a new let. According to one London letting agency, Atlas Property, managing over 500 properties, the number of tenants submitting CVs to help them secure a let has jumped by 20 per cent over the last 12 months.

Where will it all end?

A spokesperson for the Department for Levelling Up, Housing and Communities told The Guardian:

“A fair deal for renters remains a priority for the government. We are giving councils £316m to tackle homelessness and make sure families are not left without a roof over their heads.”

A valid question is: will the new regime under Liz Trust and her team press ahead with Michael Gove’s radical reforms in their present form, or will they re-assess the whole matter of the private rented sector in England with a balanced view?

Is it not a good time to lobby government to come up with a more even handed approach to the reform of the sector, one that would give landlords an incentive not just to stay in the sector, but to invest more money into it. The sector has been ignored in the “mini-budget” but is it not crying out for tax reform as well?

View Full Article: Comment: what’s really behind the surge in no-fault evictions?

Landlords and agents box clever to raise £21,000 for disability charity

admin    Uncategorized     agents

Leading landlords, letting agents and other members of the private rented sector have gathered to help raise £21,000 for charity during TV star and eviction expert Paul Shamplina’s latest Rumble with the Agents event in London.

Held at the Holiday Inn hotel near Golders Green in North London on Thursday, some 200 people gathered to watch five bouts of boxing and bid during an auction for pugilistic and footballing memorabilia.

The fights included the first two women to fight at the event, but the most vocal support group of the night was provided by colleagues and friends of estate agent Neil Baldock who won his bout, revealing after the event that he trained three to four times a week in the gym in preparation for his six minutes in the ring.

“A big thanks to Paul and Rita Shamplina for the event, my brother Matt Baldock, Claudia Dellapina for her banners and all my team especially all of those who came along on the night to support me,” he added.

Expansion planned

Sponsored by industry insurance firm Hamilton Fraser, Rumble with the Agents is due to expand in 2023, which next year will be its eighth iteration.

The next London event will take place in June 2023 with a Manchester Rumble planned in December.

“We had some good fun and some good fights and the money raised will help finance some extra activities at DRUM’s centre in Watford, where the charity provides day activities and support to adults with physical and/or sensory disabilities,” says Shamplina.

Anyone interested in training to box at either of next year’s events should contact Shamplina via info@rumblewiththeagents.co.uk

View Full Article: Landlords and agents box clever to raise £21,000 for disability charity

Council took action against me after tenant started fire?

admin    Uncategorized     agents

We had a tenant who accidentally set fire to our 4 studio flats causing extensive damage. The council subsequently wanted to interview me under caution for suspected HMO breaches.

Out of our depth, we approached Possession Friend and following a Fixed Penalty

View Full Article: Council took action against me after tenant started fire?