The Right Amount Of Debt On Your Property Portfolio And Property Business

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What is the right amount of debt for a property investor?

Too little debt can be as costly as too much on your property portfolio, so maintaining your debt correctly is vital to your property business.

In this episode of The Property Tax Show

View Full Article: The Right Amount Of Debt On Your Property Portfolio And Property Business

DWP to spend £20m ejecting bad landlords from ‘exempt’ accomm sector

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Local councils in England can now apply for a share of a £20 million pot that’s been made available to drive up standards in the supported housing sector.

The government wants to hear from authorities dealing with poor quality provision or unscrupulous landlords exploiting vulnerable residents by charging high rents for poor-quality accommodation while offering almost no help.

It cites landlords providing as little support as dropping off a box of cereal but claiming £250 per week in an area where the average rent is £80.

Supported – or exempt – accommodation is non-commissioned and unregulated supported housing where tenants include ex-prisoners, addicts, rough sleepers and fleeing survivors of domestic abuse.

Landlords can apply for provider status, exempting them from local licensing regulations and housing benefit caps, meaning that councils have few powers to act over the quality and safety of homes or how tenants are treated.

Clamp down

To clamp down on the sector, the new funding programme will give councils resources to carry out inspections and enforcement activity. Alongside this, the government has introduced new minimum standards to prevent landlords from exploiting some of the most vulnerable tenants.

Local authorities will get new powers to better manage supported housing so rogue landlords can’t exploit the system, while there will be changes to Housing Benefit regulations to define care, support and supervision.

Minister for Welfare Delivery, David Rutley MP (main picture), says: “Having a settled home gives people the security to improve their lives by getting on the employment ladder or taking other steps towards financial independence.

“This, supported by changes we recently announced which will give people on benefits the choice of putting money towards a deposit, provides the chance to make progress on the pathway to home ownership.”

This programme builds on the success of £5.4 million year-long supported housing pilots in Birmingham, Blackburn with Darwen, Blackpool, Hull and Bristol.

View Full Article: DWP to spend £20m ejecting bad landlords from ‘exempt’ accomm sector

Lower EPC rating after improvements – Is there an official referee?

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I have an EPC from 2009 which rated my house as a D67 this noted that there was ‘partial double glazing ‘ and recommended that full double glazing be fitted, which would boost the rating to a C76. This was duly done.

View Full Article: Lower EPC rating after improvements – Is there an official referee?

Supported Housing Crack Down

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Unscrupulous Supported housing providers who exploit vulnerable residents by charging high rents for poor-quality accommodation and offering almost no help will be driven out of the supported housing market by a new £20 million government improvement programme launched on 2 July 2022.

View Full Article: Supported Housing Crack Down

Landlords oppose evictions, pet rights and benefits tenant reforms in White Paper

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Landlords have revealed that they oppose three of the key reforms proposed by the government in its Fairer Renting White Paper.

The research by Total Landlord Insurance among nearly 1,100 landlords shows that 60% don’t support the abolition of Section 21 evictions, 57% are against the right to allow tenants to rent with a pet unless they can reasonably refuse and 58% are also against plans to make a blanket ban on tenants renting with children or with the support of benefits illegal.

But some elements of the White Paper are supported by landlords.

Nearly two thirds of landlords are in favour of giving tenants stronger powers to cease arbitrary rent review clauses such as unjustified rent increases, while a similar proportion of landlords were in favour of doubling notice periods when rent increases are justifiably implemented.

Most surprisingly, 89% are behind the creation of a new ombudsman to deal with rental market disputes.
The proposals may also deliver the Conservative’s stated aim of chasing more landlords out of the PRS with 17% of those canvassed by the survey saying they’d reduce their portfolios if the proposals become law.

“We’ve waited with bated breath for three years to hear the detail of the Government’s proposed rental market reforms and while it’s fair to say that their latest plans are rather tenant focussed, any attempts to improve the sector are extremely welcome and should improve standards for all stakeholders regardless of what side of the tenancy agreement they stand on,” says Eddie Hooker (pictured), CEO of the Hamilton Fraser Group, which operates Total Landlord Insurance.

“Despite this, our latest gauge on landlord sentiment shows that the vast majority are in favour of greater tenant protection and a fairer, more level playing field across the rental sector.

“This has always been the case and while there are bad apples in every batch, the view that all landlords are money hungry tyrants who forsake tenant welfare to increase their rental yield simply isn’t the case.”

Read the White Paper in full.

View Full Article: Landlords oppose evictions, pet rights and benefits tenant reforms in White Paper

Put your EICR date in the diary now to avoid a shocking bill

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HMO landlords face paying thousands of pounds for electrical equipment when new regulations kick in later this year.

An amendment to BS7671 (Electrical Regs) means HMOs must have AFDDs (arc fault detection devices) in single phase AC final circuits supplying socket-outlets with rated current not exceeding 32A.

Satisfactory rating

Those landlords with an Electrical Installation Condition Report (EICR) due in the next six to nine months should consider getting it done before the law changes on 28th September, advises former electrician and Portsmouth landlord, Graham Castellano. He explains that after this time, any electrical installation condition reports on HMOs should class the absence of these devices in the consumer unit (CU) as a C2, which means it will need remedial work to get a ‘satisfactory’ rating.

Castellano says the device can sometimes be inserted directly in place of the circuit breaker in an existing unit, but if that isn’t possible, a replacement unit would be needed. Each device costs about £150 – with one needed for each socket circuit – plus the electrician’s costs for the remedial work and retest. With a new consumer unit, this could easily cost £2,000 per property.

More expense

He adds: “The AFDDs contain microprocessors, which are susceptible to damage from mains-borne spikes. This might lead to having to install surge protection devices at the consumer unit as a minimum – more expense.”

Portsmouth & District Private Landlords Association chair, Martin Silman, says it wants to see how fires caused by electrical distribution faults are split between premises with a current/valid EICR versus those without. “Our fear is that those with up-to-date and tested electrical systems are being penalised, by being forced to pay for expensive upgrades within their consumer units, to reduce risks that do not normally occur in well maintained properties,” adds Silman. “Sadly, this ‘regulation creep’ is all too common and continues to push up rents and make life harder for landlords.”

View Full Article: Put your EICR date in the diary now to avoid a shocking bill

Landlord partnership sells 29 residential rental properties for £10.6 million

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Real estate investment manager Europa Capital and joint venture partner Addington Capital have sold their Lancelot portfolio of 29 residential properties to Mountview Estates Plc for £10.6 million.

The properties comprise 17 houses and 12 flats (see photo) mainly in London and the South East, all leased on regulated, assured and life tenancies, providing a gross rent of £261,243 a year.

Project Merlin

The properties were acquired by the joint venture in October 2018 as part of the Project Merlin acquisition – a portfolio of mostly old housing stock in Greater London made up of 202 units (43 houses and 153 flats) for £55 million.

Since then, Addington Capital has been asset managing the properties with its sister property management and leasing company, AddLiving, providing property management.

Matthew Allen, principal at Addington Capital, says since acquisition it has been looking for opportunities to re-package the properties and add value.

He adds: “As a standalone regulated portfolio, Lancelot presented a relatively rare opportunity to acquire these kind of reversionary interests in bulk. The last of these statutory tenancies were created in 1989 and so there’s a dwindling supply. We ran a competitive process and Mountview, as a specialist buyer, is very familiar with the kind of stock and was a reliable counterparty.” 

Operating Partner

Addington Capital was set up in 2010 as an independent asset management and investment business and operates in the office, retail and residential sectors as an operating partner, working closely with its partners to create value through active asset management.

View Full Article: Landlord partnership sells 29 residential rental properties for £10.6 million

Partnership seals multi-million pound acquisition deal

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Real estate investment manager Europa Capital and joint venture partner Addington Capital have sold their Lancelot portfolio of 29 residential properties to Mountview Estates Plc for £10.6 million.

The properties comprise 17 houses and 12 flats (see photo) mainly in London and the South East, all leased on regulated, assured and life tenancies, providing a gross rent of £261,243 a year.

Project Merlin

The properties were acquired by the joint venture in October 2018 as part of the Project Merlin acquisition – a portfolio of mostly old housing stock in Greater London made up of 202 units (43 houses and 153 flats) for £55 million. Since then, Addington Capital has been asset managing the properties with its sister property management and leasing company, AddLiving, providing property management.

Matthew Allen, principal at Addington Capital, says since acquisition it has been looking for opportunities to re-package the properties and add value. He adds: “As a standalone regulated portfolio, Lancelot presented a relatively rare opportunity to acquire these kind of reversionary interests in bulk. The last of these statutory tenancies were created in 1989 and so there’s a dwindling supply. We ran a competitive process and Mountview, as a specialist buyer, is very familiar with the kind of stock and was a reliable counterparty.” 

Operating Partner

Addington Capital was set up in 2010 as an independent asset management and investment business and operates in the office, retail and residential sectors as an operating partner, working closely with its partners to create value through active asset management.

View Full Article: Partnership seals multi-million pound acquisition deal

Landlord ignored order to share horror house with tenants

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A rogue landlord who rented out a ‘death trap’ HMO has been fined £3,660 after he failed to make vital safety improvements.

Paul Ettienne lived with five tenants in a dangerous two-bedroom property in Headstone Drive, London, which had previously been banned from use by Harrow Council. Inspectors discovered that the HMO was unlicensed, had poor electrics, overloaded extension leads and a large window unit secured with tape.

Illegally installed

The disrepair was so bad that one plug in the loft was serving a network of daisy-chained extension leads powering electric fires, TVs, music system, and lamps to the eves in the loft which had been sectioned off as small bedrooms. In order to get to the rooms, tenants would have had to use an illegally installed staircase with no fire protection. The loft itself had had load bearing removed and was not safe for habitation. 

A large window unit on the first floor was held with tape and installed the wrong way around with the handle on the outside.  

Previous prosecution

Ettienne had previously been prosecuted in 2019 for breaching an Emergency Prohibition Order and was found to be still flouting the law despite having been handed a large fine. He had made no attempt to comply with the order and pleaded guilty at Willesden Magistrates Court, blaming his inaction on the pandemic and a loss of income.  

Councillor Anjana Patel, cabinet member for environment and community safety, says: “Not only did Etienne ignore the conditions of the protection order, but he thought he was above the law and could get away with housing tenants in his death trap property. Thanks to the work of our officers the law caught up with him and he has a price to pay.”

View Full Article: Landlord ignored order to share horror house with tenants

Former housing minister and evictions ban architect Chris Pincher resigns

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Chris Pincher, a former housing minister and architect of Covid’s painful eviction ban laws for landlords, has resigned from his latest government job at the Conservative whip’s office.

The 52-year-old, who until today had been working as the party’s Deputy Chief Whip since leaving his housing job in February this year after two years at the Department of Levelling Up, Housing and Communities.

The Sun reports that Pincher resigned last night after several MPs reported him for drunken behaviour at London’s Carlton Club during which he is alleged to have groped two junior members of staff.

Reports indicate he was barely unable to stand up after drinking “far too much”, his resignation letter released today reveals.

Evictions bans

Pincher was one of the Government’s key housing ministers during the Covid months and fought off criticism of his department’s handling of Covid eviction restrictions announcements, which were often made suddenly and on several occasions late on a Friday afternoon.

His elevation to the whip’s office in February raised eyebrows as he had held a position there previously but resigned in 2017 after being accused of making an unwanted pass at former Olympic rower turned wannabe MP, Alex Story, several years earlier.

An internal investigation cleared him of any misconduct, and Pincher exonerated himself last year after organising an effort to save the PM from a back-bench revolt.

In his resignation letter Pincher says: “Last night I drank far too much.

“I think the right thing to do in the circumstances is for me to resign as deputy chief whip. I owe it to you and the people I’ve caused upset to, to do this.”

He said that Boris Johnson would continue to have his “full support from the back benches”, adding: “It has been the honour of my life to have served in Her Majesty’s Government.”

View Full Article: Former housing minister and evictions ban architect Chris Pincher resigns