Leaseholders now protected from unfair safety costs

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Many leaseholders will for the first time be legally protected from unfair bills to make their homes safe as measures in the Building Safety Act 2022 come into force on 28 June 2022.

Those responsible for historical safety defects

View Full Article: Leaseholders now protected from unfair safety costs

Can I increase rent while waiting for a S21 eviction?

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We are using Section 21 to evict a tenant because the freeholder is legitimately complaining about overcrowding and noise (birth of two children in a one-bedroomed flat post moving in).

However, the rent has always been paid, albeit at a lower than the market level.

View Full Article: Can I increase rent while waiting for a S21 eviction?

Growing costs force landlords to consider rent rises

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More than 40% of landlords are likely to increase rent on one or more properties during the next year despite tenants’ ability to pay rent being their number one concern.

A HomeLet/Dataloft survey of 1,000 landlords found that over half of them would be raising rent to cover their increased costs while an additional third would do so in response to market pressures. Concerns about the abolition of Section 21 notices and other taxation or legislative issues also rate highly.

Top concern

However, the study found that 36% of landlords have no plans to increase the rent on any of their portfolio over the next 18 months – no doubt a relief to the 78% of renters who are worried about how they will pay their rent. In the firms’ other study of 12,000 renters it is ranked by one in four as their top concern in the next year, closely followed by worries about landlords increasing rent.

HomeLet CEO Andy Halstead says landlords know the pressure on tenants, but sometimes have to put rent up due to growing costs. “There simply isn’t enough housing stock,” he explains. “Many landlords are choosing to exit the market, which only causes further strain on stock levels and letting agent businesses.”

Rough ride

Adds Halstead: “The government’s commitment to legislation in the market through the Renters’ Reform Bill will provide the most significant change to rental law in a generation and I can’t see any positives. We are in for a rough ride.”

Dataloft MD Sandra Jones believes lessons can be learned from the build-to-rent sector where providers understand the importance of consistently managing customer expectations. “They use their scale and resources to negotiate with utility suppliers, offering greater security and cost predictability,” she adds. “With costs and concerns rising, this is a time when all renters will value a professional and engaged relationship with their landlord.”

View Full Article: Growing costs force landlords to consider rent rises

EMERGENCY Recession Webinar

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The news is currently full of talk about recession. In fact, it feels like we are talking ourselves into a recession. If we do go into a recession, what will this mean for you and your property investing?

This is VERY important for you because the next 24 months could literally be make or break.

View Full Article: EMERGENCY Recession Webinar

Complaints lead council to consider curbs on Northampton HMOs

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West Northamptonshire Council could get tougher on Northampton’s HMOs after launching a long-awaited review into the sector.

It will investigate claims that its 1,300 registered HMOs are having a detrimental impact on the local community with issues raised including general poor maintenance, rubbish causing a fire hazard and streets crammed with parked cars.

Robust analysis

Deputy leader, councillor Adam Brown, says the review will include a robust analysis of current policies concerning HMOs in Northampton, as well as ways to use best practice from elsewhere in the country. He adds: “We wanted to get the review started as quickly as possible, but we’re also aware of the fact that it needs to be done as thoroughly and as well as it can possibly be done in order to deliver the results that will have the faith of the public. There’s never any point in rushing through an inadequate process and leaving people unsatisfied with the results at the end of it all.”

Final decision

As part of the study, the local authority will quiz landlords, tenants, estate and letting agents, residents and resident associations, colleges, businesses, students and key workers. A resulting draft report will provide another opportunity for stakeholders to give their views and it expects to make a final decision in the Autumn. The review was originally announced last year and should have been completed in April.

The council introduced an additional licensing scheme, covering properties with three or four occupants in two or more houses, in February 2020.

View Full Article: Complaints lead council to consider curbs on Northampton HMOs

Landlords urge MSPs to think again before landmark eviction vote

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Landlord and housing groups have made an 11^th hour appeal to the Scottish Parliament to ditch potentially devastating new eviction laws.

It is due to debate the final stage of the Coronavirus (Recovery and Reform) Bill tomorrow (28^th June) which includes plans to give tribunals the final say on tenant evictions in Scotland. All eviction grounds would become discretionary, including non-payment of rent, and would also require the First-tier Tribunal to consider whether landlords had complied with a pre-action protocol for rent arrears eviction cases.

Shatter confidence

Organisations which represent landlords believe the measure will shatter confidence in the rental sector and lead to large numbers of homes being withdrawn from the market. For those landlords who want to sell their rental property – either to fund retirement or to free up capital – not being able to end the tenancy will significantly reduce its value. They estimate up to one in five landlords could withdraw from the market as a result.

The Scottish Association of Landlords, NFUS Scotland, the National Trust for Scotland and Scottish Land & Estates have warned that although the proposals aim to offer greater protection to a very small number of tenants facing eviction, they will backfire on a far greater number of people looking to rent homes.

Real danger

John Blackwood, chief executive of the Scottish Association of Landlords, says: “There is a tried and tested eviction process which already works well and protects tenants and landlords. There is a very real danger that if this goes ahead landlords will lose confidence and simply sell homes at a time when they are in great need.”

View Full Article: Landlords urge MSPs to think again before landmark eviction vote

Demand presures on the PRS are not easing and still pushing up rents

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The latest Propertymark PRS report indicates properties available per branch are remaining static at 10, but demand from tenants is continuing to increase.

In May there was an average of 113 new applicants registered per member branch.

View Full Article: Demand presures on the PRS are not easing and still pushing up rents

Banning of Landlords using Airbnb?

admin    Uncategorized     agents

Hi Everyone, I’ve just read in ‘The Daily Mail and The Telegraph’, that Gove (in all his wisdom!), is now proposing banning Landlords from using short-term holiday let web portals such as Airbnb. He is also considering implementing the minimum term for holiday lets to be 90 days or over!

View Full Article: Banning of Landlords using Airbnb?

What is the best way to sell buy-to-let property?

admin    Uncategorized     agents

With inflation at a 40 year high, interest rates are at a 13 year high, a lot of landlords are planning to sell some properties in their portfolios to use the equity tied into them to pay off the mortgages on other properties to avoid further rises but selling buy-to-let property can be a very slow process.

So what options do landlords have to sell rental properties?

The High Street Options

Sell Buy–to–let Properties with Vacant Possession

The main advantage of this option is an uncompromised selling price but be prepared to spend a lot of time and money (especially if legal action and bailiffs are required) to provide vacant possession which will affect the ‘walk away’ funds available after agency fees and legal costs are deducted.

Sell Buy–to–let Properties with Tenants in Situ

The advantage of this option (if tenants cooperate) is less VOID time than selling with vacant possession while the disadvantages are the added complications and higher risks of the sale collapsing.

Most investors will not pay full market value for a property so sellers should expect to accept an offer in the region of 85 – 95% of the market value and legal costs will be higher than routine sales.

Estate agents do not collect information about tenants so sellers will need to provide buyers with the information themselves or allocate the role to someone else.

Alternative Options – Landlord Sales Agency

Landlord Sales Agency sell buy–to–let properties with vacant possession or tenants in situ.

• They manage the process with less disruption to tenants
• They manage the process with minimal seller involvement
• They sell properties as individual lots or as portfolios
• They have buyers who will make an offer without even viewing properties due to the legal safeguards Landlord Sales Agency put in place to ensure the data they collect is reliable
• They secure all offers as soon as they are accepted to ensure buyers do not try to renegotiate later in the process and fewer sales collapse
• They sell individual properties and portfolios ranging from £100,000 – £10M
• They sell and complete fast (typically 12 – 16 weeks or slightly longer depending on the circumstances)

Sellers typically receive between 80 – 90% of the property value, depending on the number of tenancies and the complexity of the sale. They pay up to £720 (inc VAT) towards legal costs so in most cases, the amount sellers receive is their walk away figure.

David Coughlin founder and CEO of Landlord Sales Agency said,

“We’re all about delivering speed, efficiency, and exceptional customer service. With the rise in popularity of HMOs in the last 10 years, landlords are now finding it more and more difficult to sell ex rental properties with vacant possession without having to wait years for multiple tenancies to end. The simple and obvious answer is to sell to other investors who see established and trusted tenants as a bonus, not a problem.

We recently paid £2.3m into a client’s bank just 16 weeks after listing her tenanted, 23 property portfolio. We sold it and completed in less than 16 weeks.”

Contact us now to find out how we can help you sell your portfolio fast.

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Clamp down on letting second homes planned

admin    Uncategorized     agents

Owners of second homes in many coastal and holiday locations could face a ban on renting using lettings websites like Airbnb. Tourist hotspots such as coastal towns in Cornwall and Devon are particularly affected.

Communities being eroded

In many of these towns, locals claim that their communities are being eroded because of a scarcity of affordable homes to buy, or to rent long-term.

According to East Devon Watch, Cornwall has 12,776 second homes and more than 11,000 holiday lets, while 21,817 people are on its housing register. Last year, the council installed emergency one-bed shelters for vulnerable people in Truro and Penzance. It has also placed people into bed and breakfast accommodation and static caravans.

The situation is only going to get worse as buy-to-let landlords, faced with increasing regulations, taxation, and the latest proposals contained in the Government’s White Paper – ‘A Fairer Private Rented Sector” – see the financial benefits of short-term lets over long-term lettings.

Buy-to-let exodus

A report published by ARLA Propertymark claims that 230,000 UK landlords – faced with Micael Gove’s White Paper – are likely to switch to short-term lets.

Gove’s long-awaited Government White Paper proposes significant changes to the private rented sector: confirming the abolition of Section 21; the ending of fixed-term tenancies; and the inability of landlords to refuse to let to families, housing benefit tenants and pets.

ARLA Propertymark says that around 10 percent of buy-to-let landlords are being tempted to join the ranks of the 46,000 investors who have already made the move form log-term to short-term letting. Those landlords with five or more buy-to-lets, says the estate agent’s body, were considerably more likely to take the plunge.

With short-term listing numbers on Airbnb rising rapidly over recent years, plans are now being drawn up by Michael Gove, the levelling-up secretary, which would give regional mayors extra powers to restrict people renting out second home properties.

Second-home ownership has always been a politically contentious issue. A more recent problem has been the rapid rise of the online rental platforms such as Airbnb allowing owners to more easily market their properties to short-term tenants.

The ever increasing Government regulation of the buy-to-let sector, the recent growth of domestic holidays during Covid, and now the even more dramatic proposals under the White Paper, ‘A Fairer Private Rented Sector’, is driving the exodus of buy-to-let long-term.

A further incentive for landlords to switch is the higher rental returns that are possible with holiday lets. It is incentivising landlords to evict their long-term tenants because they can make more money from short-term holiday lets. It is feared that with the end of section 21 in sight, landlords will use the time they have left to evict even more tenants before it is too late.

Growing political pressure

The move to control short-term lets is a result of growing political pressure on the issue. Conservative MPs representing seats in the South and South West fear the issue could cost them their seats at the next general election if something is not done about the problem.

A proposed amendment to the government’s “Levelling-Up and Regeneration Bill” currently in the committee stage, currently going through parliament, would require anyone wanting to rent out their property on a short-term basis to apply for planning permission for a change of use.

Under the proposed scheme now under consideration by ministers, and revealed in James Forsyth’s column in The Times newspaper, powers would be given to regional mayors to impose a ban on owners letting their properties on a short-term basis. The counties of Cornwall, Devon and Norfolk have all expressed an interest in using these extra powers as part of their “devolution deals”.

It would mean that the rest of the country would get similar powers to those already existing in London where short-term letting is restricted, and has been for many years, capped at a total of 90 nights per year.

The problem that councils have is that there is no data, no registration system where they can identify those properties let-out in this way, to enable them to effectively enforce the 90-day rule.

The Scottish parliament has introduced a licensing scheme for Airbnb-style letting enabling councils to identify registered owners who operate short-term lets for more than 28 days a year. If they do they have to apply for planning consent for change of use.

Bob Seely, the Conservative MP for the Isle of Wight, who has campaigned on the issue, told The Times newspaper, that any initiative was welcome:

“We have got to find a way of protecting communities and we are in the market for sensible ideas that can help,” he said. “Places like Devon, Cornwall, the Isle of Wight and the Lake District have lived too long with the problem of hollowed-out communities devoid of life apart from a few months of the year. What we need is creative ideas to solve some of these problems.”

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View Full Article: Clamp down on letting second homes planned