Do we need a database of rogue tenants?

admin    Uncategorized     agents

Hello everyone, I am going to respond to the government’s White Paper consultation.

Firstly, there appears to be less support for PRS landlords than we had been led to believe the new Bill would offer.

As someone with a small portfolio

View Full Article: Do we need a database of rogue tenants?

Properties Urgently Required – Exclusive P118 members deal

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Lettingsupermarket.com™ urgently requires stock having let 80 properties in the last 4 weeks.  We have huge tenant demand and a list of 1000+ tenants who have registered their interest in the last 4 weeks.

Exclusive to new property118.com clients Lettingsupermarket.com™ is offering 3 months of free management on all properties let on the full management package at just 5% + Vat (£6%).  

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TRENDS: Landlords in Outer London and South report surge in demand for rental property

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The UK economy might be on the verge of tanking, but London and the South’s private rental sector is on fire, latest figures show.

Landlords with properties being marketed for rent in suburban London have reported a big surge in demand over the past three months, a survey has reported.

Lender Paragon says a survey of landlords in outer London it underook revealed that 85% said tenant demand had stiffened, up from 79% during the previous three months.

The survey also suggests that London’s rental market is recovering in the more affordable outer suburbs, and has caught up its Home Counties counterparts where 90% of landlords told Paragon they had seen ‘strong’ demand among tenants.
The research, carried out among some 700 landlords by BVA BDRC, also reveals that the incidence of voids has fallen dramatically since the same period a year ago.

Voids avoided

In Q2 2021, 35% of Outer London landlords said that they had experienced an empty property within the last three months, the second highest region behind the North East.

A year on, Q2 2022 has seen this figure fall to 21%, with only landlords in the West Midlands less likely to have reported a void.

Richard Rowntree, Paragon’s mortgage MD, says: “We know that the private rental market in London was hit particularly hard by the Covid pandemic but has rebounded strongly since and these latest figures provide further evidence of this.

“As one of the world’s greatest cities, London is extremely dynamic, constantly evolving as a diverse mix of people come and go, calling it home as they study, work, travel or raise families.

“This is why it is important for the capital to have a thriving PRS, enabling people to benefit from the flexibility that rented homes provide.”

View Full Article: TRENDS: Landlords in Outer London and South report surge in demand for rental property

Rental reform should not be distracted by leadership race

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Rental reform should be the focus of any debate about property in the leadership race to find the next Prime Minister, the Association of Independent Inventory Clerks (AIIC) says.

The AIIC’s chair, Daniel Evans, said: “The latest chaos to surround Westminster could overshadow and delay the introduction of rental reform

View Full Article: Rental reform should not be distracted by leadership race

EXPERT REACTION: What will the base rate rise mean for the property market?

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Yesterday’s decision by the Bank of England to raise its base rate to 1.75% has led many economists to predict a recession in the offing as the bank attempts to control rampant inflation.

While this will make some landlords’ variable rate buy-to-let mortgages more expensive, and impoverish some tenants who are heavily in debt, it should be noted that lenders do not always pass these rate rises on either immediately or directly.

Millions of landlords are protected from rate rises by their fixed rate mortgages, and recent rises in rents mean many have seen increased income from their properties.

But what might this rate rise mean for the wider property market. We canvassed some expert opinion from within the property industry.

Trevor Abrahmsohn of Glentree International

“Thank the Lord that the BoE has at last ‘woken up and smelt the coffee’ by raising the interest rate to 1.75%. 

“With inflation predicted to peak at 13.3% in October, even at this low rate by comparison, will not, I fear, have much effect on the inflation rate.  They are going to have to crank it to 4 or 5% in order to make a dent.

“But I have to say that despite the looming storm clouds of recession and stratospheric energy costs, the property market is still reasonably buoyant, and carries a shortage of supply which will underpin prices. 

“This latter data is the bellwether of the market and as soon as supply exceeds demand, prices will inevitably fall.

“I think the top of the market will be seen as the summer of 2022 and at best, values will level pay and at worst, will fall.”

Jason Tebb, Chief Executive Officer of OnTheMarket.com

“This latest rate rise was widely expected, given continued high inflation, but we don’t expect it to quash positive buyer and seller sentiment in the housing market. 

“As stock levels continue to tick up, we are gradually moving towards a more rebalanced market in terms of supply and demand. Yet this will take time and until then, the ‘new normal’, an elevated version of the pre-pandemic market, continues.”

Nicky Stevenson, MD of Fine & Country

“Previous interest rate rises have failed to dampen growth in Britain’s red-hot housing market — but today’s hike is the biggest in more than a quarter of a century and will of course be painful for many.

“For those on standard variable rates, the arguments in favour of switching to a fixed deal have never been more compelling. Fixing rates now will allow you to insulate yourself against further rises for years to come.”

Marcus Dixon, Director of UK Residential Research at JLL

“The Bank of England continues to walk a challenging tightrope, one which some say it stepped onto too late.

“Global economies continue to struggle with rising inflation, a combination of demand returning following the lifting of covid restrictions alongside the implications on food and fuel costs following the war in Ukraine.

“The Bank of England alongside many global banks is responding by increasing rates in an attempt to counter inflation.”

Anthony Codling, Twindig

“As widely anticipated, the MPC decided to raise Bank Rate by 50 basis points from 1.25% to 1.75% today as the Bank of England gets tough on inflation and the causes of inflation, seeking to control inflation through the use of monetary policy.

“We expect that this latest 50 basis point rise in Bank Rate will feed through to mortgage rates in September.

“These rises are likely to increase floating mortgage rates and standard variable rates by half of one per cent (50 basis points).

“If your floating rate is 2.50% today it is likely to be 3.0%in September leading to an additional monthly mortgage payment of £25 per month for every £100,000 borrowed.”

Walid Koudmani, chief market analyst at XTB

“We saw investors sell out of their pound sterling positions in reaction to the UK’s biggest interest rate hike in 27 years.

“The hike itself was widely expected but the moods of GBP investors dampened from the negative rhetoric from the Bank of England itself on the UK’s economic outlook.

“The UK central bank expects the UK economy to shrink in the final quarter of this year and suffer from a recession for all of 2023. This marks a stark turn in their projections.”

View Full Article: EXPERT REACTION: What will the base rate rise mean for the property market?

‘Trophy Mansion’ owned by bankrupt property guru repossessed by bank

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The next chapter in the troubling story of property guru Glenn Armstrong has begun after court records have revealed that the infamous £3m seven-bedroom ‘trophy mansion’ he often used within his marketing effort has been repossessed by bailiffs.

The 62-year-old’s now former home, in which he and his wife lived for several years, had also been occupied until recently by a ‘tenant’ and business partner, but now the trio have left the premises.

A video reportedly filmed by bailiffs as they toured the huge luxury detached mansion in Newport Pagnell late last month shows brochures for his Property Millionaire Academy strewn around one room, while other parts of the house contain personal items including a child’s dollhouse, clothing and even a pair of his shoes.

The video suggests that whoever was living there departed in a hurry. The freezer remains fully stocked and the detritus of a final meal is evident on the work surfaces.

In February 2021 Armstrong was declared bankrupt after it was revealed that he owed creditors £4.9 million.

His bank accounts were frozen and an insolvency practitioner – Begbies Traynor – has spent months going through his affairs; 38 creditors were listed in the court papers, each looking to claim back sums of up to £537,000.

In February Begbies Traynor invited creditors to contact them ‘to prove their debts’, suggesting some monies may be returned.

Bank of Scotland

But one major creditor, the Bank of Scotland, who had given Armstrong a mortgage on the mansion, has now moved to recoup its money via the repossession of the mansion, called Carisbrook House.

The legal move is the final act in a sad play, particularly for the 40+ creditors who have lost considerable sums after being persuaded by Armstrong’s marketing – which featured his mansion prominently – to invest in projects he backed.

It also featured in a 2017 interview with him by Property Pillars TV (pictured, right)

Channel 4 may also be ruing the day it featured Armstrong within both its How the Other Half Live and The Secret Millionaire programmes during the late noughties, lending him much credence as a bonafide businessman.
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View Full Article: ‘Trophy Mansion’ owned by bankrupt property guru repossessed by bank

Subletting excess office space – could this be the future, post Covid?

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One leading Belfast IT firm has just sublet its office space in the city as home working or hybrid working has taken hold in the company, and this looks like outlasting the Covid pandemic.

Liberty IT in Belfast has bitten the bullet on the issue and decided to lease its excess space in response to what it has termed the ‘new normal’, that is having most of its staff settling in to the hybrid way of working.

Reducing costs

IT work of course lends itself to this new mode of work, and the same won’t apply to every organisation. But if the trend really is here to stay there could be a fair bit of excess space in city offices and there will be an opportunity for companies to reduce their property costs by sub-letting.

Liberty is one of Belfast’s oldest-established IT or “tech” firms. Even as the guidance to work from home wherever possible has been lifted, the company has taken the decision to sublet over 9,000 square feet of its city headquarters building, Adelaide Exchange.

Is subletting a viable option for unwanted office space?

As yet there is no consensus view, or a definitive roadmap, as to whether businesses will be inviting or even demanding that employees, to return to their work places full time. The indications are though, most businesses of a certain type, where employees are able to work productively and flexibly, that is at home or on the move, then some form of hybrid working will become the norm and existing space will become surplus.

With the current economic situation as it is, when inflation has take off and costs are rising all round, businesses are seriously looking at ways to reduce their costs. One obvious saving world be to reduce a large slice of overhead – their property costs.

After salaries, property costs are usually a business’s biggest expense. During Covid, many businesses had to invest heavily in the IT infrastructure necessary to allow home working, so a saving on their rent payments would be one big way to off-set those costs going forward.

Subletting is one solution

But subletting is not without its difficulties. There are legal implications for both tenant as well as their landlord, and there may be a need to physically re-configure part of the building, from simply partitioning off work-floors and access ways, to some more major structural changes.

Companies that are commercial tenants with excess space are likely to be tied into a lease which may or may not have provision for subletting. But what options does a commercial tenant have if they find themselves tied into a lease and paying rent for offices that are now larger than they need?

Getting sound advice

Whether the lease prohibits subletting or not, the starting point should be discussions with the landlord, and both sets of solicitors – transparency is paramount. Following that, advice from local commercial agents should be sought to find out if there is the likely demand for the space, and how they would go about marketing it.

The legal and practical implications

The usual arrangement under subletting is that at new tenant would be found to occupy a suitable portion of the building with the original tenant still responsible to the head landlord to fulfil the lease obligations, including the rent payments and service charges. The tenant becomes landlord to the sub-tenants, charging a rent and apportioning the service charges accordingly.

It is almost certain the head landlord will have to give consent to the new arrangement and will want his or her lawyers to sanction the underlease. The original tenants will still carry their obligations under the repairing and maintenance clauses for the whole building, so it will be in their own interest to tie up the legals to protect themselves against the actions of the subtenants.

Subletting is a way of using excess space to save costs while allowing the business to stay in its existing premises.

If a tenant is not concerned about staying in the existing premises, and especially if the lease, or landlord prevents a sublet, that the tenant may consider triggering a break clause, if one is near, assigning the whole lease to another tenant, or trying to negotiate a surrender of the lease with the landlord. The latter course would usually entail paying substantial compensation to the landlord for the remaining income stream – the rent payments – being forgone.

However, a tenant could increase his chances of obtaining a lease surrender if he were to offer up a suitable tenant willing to take over. Covenant strength and length of lease commitment are the all important factors in a commercial letting, so a new attractive covenant and long lease may just swing it with the landlord.

A refurb opportunity

A change of tenant could well be an opportunity for refurbishment. There are looming obligations to be met for the new energy efficiency (MEES) standards. And a modern office building many well benefit from, and be made more marketable, if it is upgraded for heating, cooling, ventilation and IT infrastructure, as well as an optimised configuration for post Covid working.

View Full Article: Subletting excess office space – could this be the future, post Covid?

Sadiq Khan wants landlords to pay ‘tenant relocation payments’

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London Mayor Sadiq Khan is urging the next Prime Minister to bring in ‘tenant relocation payments’ when a renter is being moved through no fault of their own.

He made the comments to the London Assembly during a debate on the Fairer Private Rented Sector White Paper that has been published by the government.

View Full Article: Sadiq Khan wants landlords to pay ‘tenant relocation payments’

Outer London’s landlords report a surge in demand

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The proportion of landlords operating in Outer London who have reported increasing demand from tenants has surged since the previous quarter, Paragon Bank reports.

The bank says that it has carried out research that reveals in the first quarter of 2022

View Full Article: Outer London’s landlords report a surge in demand

The Hawks increase interest rates by 0.5%

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The Bank of England Monetary Policy Committee (MPC) voted by a majority of 8 – 1 in favour of the Hawks to increase interest rates by 0.5% this month to a Base Rate of 1.75%. This is justified by a near doubling in wholesale gas prices since May

View Full Article: The Hawks increase interest rates by 0.5%