LATEST: Courts drop Covid eviction rules that cost thousands of landlords dearly

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The Master of the Rolls Sir Geoffrey Voss (pictured) has revealed that the ‘overall arrangements’ brought in by courts to control and limit evictions during the Covid pandemic have officially come to an end as of 1^st November.

This brings down the curtain on an 18-month period of extreme stress and additional expense for landlords seeking to evict tenant unless they involved a narrow set of circumstances including ‘extreme rent arrears’ and anti-social behaviour.

Although expected at some point this year as Covid restrictions relaxed, the key change for landlords confirmed today is that those seeking to evict tenants will no longer have to undergo ‘review hearings’ before moving to ‘substantive hearings’.

Delays and expense

This means the long court delays and additional expense experienced by thousands of landlords during the pandemic will now become a thing of the past and eviction will hopefully return to some sort of pre-pandemic ‘normal’.

Also, the prioritisation of certain kinds of evictions set out in the ‘overall arrangements’ brought in June last year will now be wound down.

“The Court should revert to fixing a date when it issues the claim form with the former standard period between issue and hearing of eight weeks applying again,” says Paul Sowerbutts (pictured), Head of Legal at Landlord Action.

“Cases may well again revert back to an initial hearing in a block of other private landlord matters.

“What happens and whether there will be remote hearings we will have to wait and see. But coronavirus provisions remain in force and so notices as to the effect of Coronavirus still need to be served.”

Read the official statement in full.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Courts drop Covid eviction rules that cost thousands of landlords dearly | LandlordZONE.

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LATEST: Courts finally drop Covid eviction rules that have cost thousands of landlords dearly

admin    Uncategorized     agents

The Master of the Rolls Sir Geoffrey Voss (pictured) has revealed that the ‘overall arrangements’ brought in by courts to control and limit evictions during the Covid pandemic have officially come to an end as of 1^st November.

This brings down the curtain on an 18-month period of extreme stress and additional expense for landlords seeking to evict tenant unless they involved a narrow set of circumstances including ‘extreme rent arrears’ and anti-social behaviour.

Although expected at some point this year as Covid restrictions relaxed, the key change for landlords confirmed today is that those seeking to evict tenants will no longer have to undergo ‘review hearings’ before moving to ‘substantive hearings’.

Delays and expense

This means the long court delays and additional expense experienced by thousands of landlords during the pandemic will now become a thing of the past and eviction will hopefully return to some sort of pre-pandemic ‘normal’.

Also, the prioritisation of certain kinds of evictions set out in the ‘overall arrangements’ brought in June last year will now be wound down.

“The Court should revert to fixing a date when it issues the claim form with the former standard period between issue and hearing of eight weeks applying again,” says Paul Sowerbutts (pictured), Head of Legal at Landlord Action.

“Cases may well again revert back to an initial hearing in a block of other private landlord matters.

“What happens and whether there will be remote hearings we will have to wait and see. But coronavirus provisions remain in force and so notices as to the effect of Coronavirus still need to be served.”

Read the official statement in full.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Courts finally drop Covid eviction rules that have cost thousands of landlords dearly | LandlordZONE.

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BREAKING: New bank for landlords and property investors launches

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A new bank specifically for property investors has launched to help experienced and busy landlords manage and grow their portfolios.

Monument is the first challenger bank in the UK to focus on the needs of 4.8 million ‘mass affluent’ clients: professionals, entrepreneurs and property investors who want a bank to help them save and grow their wealth.

Clients will be able to borrow up to £3 million for buy-to-let property investments, supported by specialist relationship managers with experience of the market.

Monument, which has already raised £60 million, will be a fully-licensed deposit-taking bank, providing easy access and fixed-term savings products with competitive rates for those looking to save upwards of £25,000.

CEO Mintoo Bhandari (main picture) says its approach to client loyalty is fundamentally different as well; if an existing saver deposits money for a subsequent fixed term, they will get a better rate than a new customer, while an existing borrower who renews their loan, or takes an additional loan, will also be offered a favourable rate.

Bhandari says: “We are very excited to take our first steps of addressing the substantial, aspirational, hard-working, asset-rich but time-poor community which holds trillions in wealth in the UK and which lacks the right financial services partner. Our lending specialists, with their many years of dealing with clients’ borrowing needs, will truly bring a better experience to experienced landlords.”

Monument’s new app will let clients open savings accounts in minutes and also offers simultaneous video and co-browsing so that advisors can interact with clients almost as if they were in the same room, saving time by addressing questions live.

But Monument is not unique – a similar ‘challenger’ bank called Hammock launched in August last year.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – BREAKING: New bank for landlords and property investors launches | LandlordZONE.

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UK Property Market and Auction Review

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Using Property Auction data Jay Howard, Rod Turner, Piotr Rusinek and I predict the UK Property Market as well as analyse 2 property investment deals coming up at auction.

Please click on the video below:

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Landlords to be given more time to meet proposed minimum EPC standard – claim

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Landlords are to be given an additional year to conform to the proposed mandatory minimum EPC band C standard for rental properties, a national newspaper has claimed.

The Times has made the unsourced claim, saying that the new rules will apply to new lettings from 2026 rather than the proposed 2025, with existing lettings following suit from 2028. The level of fines for non-compliance also appears to have been haggled down from £30,000 to £15,000, the newspaper reports.

The report comes at the same time that ‘top 100’ law firm JMW Solicitors, which has offices in London, Manchester and Liverpool and includes a property law practice, says approximately two million landlords will face extra costs prior to the EPC deadline, costing them £10 billion in total.

JMW’s figures, which are similar to the government’s own EPC estimates of average cost, are still lower than figures published recently within the most recent English Housing Survey.

As LandlordZONE reported in July, it estimated that a more realistic figure would be £7,646 per property.

The EPC minimum standard, which is being proposed by the Department of Business, Energy and Industrial Strategy (BEIS), is contained with an ongoing consultation on how to force landlords to upgrade their properties.

David Smith (pictured), a partner at JMW, said: “The approach taken by BEIS in their proposal is difficult to understand as it fails to take into consideration the reality of properties in the UK.

“There are some new build properties which do not meet the new requirement of a band C EPC and older properties which will never be able to meet it, regardless of the owners’ best efforts and intentions.”

BEIS is also proposing to police EPC upgrades by preventing letting agents and property portals from advertising properties that do not reach the minimum standard, and introducing a more comprehensive national database of EPC certificates.

Read The Times article (requires subscription).

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Landlords to be given more time to meet proposed minimum EPC standard – claim | LandlordZONE.

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Tax changes for Airbnb landlords ‘in the pipeline’ to stop gaming of the rates system

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Some holiday lets owners are ‘gaming’ the system to claim business rate relief, comments made by the Housing Minister Lord Greenhalgh suggest, who has promised action to clamp down on the practice.

In a Lords’ debate on second homes, peers voiced concerns that second homeowners were advertising properties as holiday rentals and avoiding council tax by registering for business rates, thereby qualifying for small business rate relief.

Shadow housing spokesperson Lord Kennedy of Southwark said this meant owners can pay very little tax and suggested a larger levy to encourage landlords to rent to tenants instead.

Lord Greenhalgh (main pic) said it was approaching this issue by, “ensuring that people do not game the system”.

Legislate

He added: “The government will legislate to require that holiday rentals meet an actual letting threshold before being assessed for business rates. This will ensure that only genuine holiday businesses can access the rate relief for small businesses. We have not yet finalised what that threshold will be.”

Under the current rules on holiday lets for business rates, a property in England is rated as self-catering and valued for business rates if it’s available to let for short periods of 140 days or more each year.

If a property’s rateable value is less than £15,000, owners may be eligible for small business rate relief. The minister also confirmed that he is still considering a registration system for holiday lets.

The Short Term Accommodation Association believes the business rates rules for holiday lets in England should apply at the threshold of 140 nights let. “We think this would result in more tax being collected across the UK, since increasing the threshold would mean fewer operators qualifying for small business rates relief than would be the case under a 70-night threshold,” says chair Merilee Karr (pictured).

She adds: “Only genuine, year-round businesses should be paying business rates and everyone else should be contributing to their local community via council tax.”

Read more about the holiday lets sector.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Tax changes for Airbnb landlords ‘in the pipeline’ to stop gaming of the rates system | LandlordZONE.

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Cost of incorporating our BTL portfolio

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Dear Property118

My wife and I are in early discussions with our Accountant about incorporating our BTL portfolio.

We mentioned this to two of our friends who have utilised your services to incorporate and were very impressed with your services

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Property investments led council into debt

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The Council is now trying to sell commercial property assets worth £600m after its property investment spree went horribly wrong. The move is part of a rescue plan imposed on it by Government ministers.

Slough Borough Council is not the only council to have invested in commercial property, and now feeling the pinch. With interest rates at rock bottom, councillors saw an easy and quick fix to their cash flow problems: income producing commercial property investments.

Lucrative deals turned sour

The trouble is that many of these investments were made outside of Borough Councillors’ and council staffs’ circle of competence, and with a rapidly declining High Street, coupled with the Covid pandemic, many of these seemingly lucrative deals have turned sour. Tenants went bust, properties came empty, and what had been cash cows have turned into cash guzzling liabilities.

Local authority investment in commercial property is now under the spotlight from central Government following these sorts of outcomes. The Treasury is looking at restricting the use of The Public Works Loan Board, stopping lending to local authorities borrowing money for commercial property investments.

Bankrupt council

The effectively bankrupt Slough Council is now overseen by Government appointed commissioners and is being forced to implement a three-year recovery plan

Following the central Government intervention, Slough’s council leaders now say they need over £100m of outside financial support in the financial years 2021-22, a figure which is far higher than their initial estimate of £15m.

The borough is said to have invested £96m betting on commercial property providing them with a steady cash flow of income. That was before Covid hit and some of their investments turned sour. A cinema in Basingstoke is a prime example of one of the hardest hit during the pandemic, with their superstores in Gosport and Wolverhampton probably fairing little better.

Commercial investments for sale

Slough Council is now trying to dispose of around one-half of its £1.2bn commercial property estate, after Government ministers have criticised the council’s leadership for “deeply concerning” mismanagement of its finances.

Slough’s problems are potentially the tip of the iceberg for central Government. These types of commercial investments by councils have been part of an upward trend, and many are likely to cause Government to have to step in to other councils as the pandemic affects their investments and their already tight budgets.

Rob Whiteman, chief executive of the Chartered Institute of Public Finance and Accountancy that carried out a review of Slough’s finances for the Government, has said:

“If we do see any more councils in that position. I think it’s going to be a handful rather than a significant number.

“The decision of the Secretary of State to intervene is really a culmination of several years of mismanagement rather than Covid. Covid may have accelerated their position.”

Councils went on a spending spree

English councils are said to have spent around £6.6bn of their taxpayers’ money buying commercial property over the three years to 2018-19, that’s according to the Public Accounts Committee.

There are now substantiated fears that this spending spree could turn nasty because commercial property asset prices have in some cases lost as much as 50 per cent of their pre-Covid values. The shift towards online shopping and home working during lockdowns tipped many tenants over the edge, cutting these council landlords’ cash-flows off at the source. Not only that, empty commercial buildings quickly switch from an asset to a liability.

Along with nine other councils, Slough was in receipt of £15m after Covid hit as part of Whitehall’s rescue plan to help struggling councils. But in Slough’s case, it was not enough. It quickly and effectively declared itself bankrupt in July after discovering an even bigger black hole in its finances.

The intervention now under Michael Gove’s remit, the local government secretary, is to give Government commissioners the power to override a council’s financial management and strategic decisions if its leaders fail to deliver on a supervised improvement plan.

Kemi Badenoch, a minister in Mr Gove’s department, has said of Slough council that damning reports into how the council is run “paint a deeply concerning picture of mismanagement, of a breakdown in scrutiny and accountability, and of a dysfunctional culture”.

“The council’s contract management is weak and has resulted in rushed procurement, missed exit opportunities, and has delivered poor value for money. There is little evidence that the Council understands the entirety of its commercial investments and their impact on its finances,” she commented.

Ms Badenoch told The Daily Telegraph that the review concluded that Slough “cannot become financially self-sustaining without considerable government support. The council cannot demonstrate a track record of making difficult decisions or of taking decisive action to bring about improvements.”

James Swindlehurst, the Labour leader of Slough council, has said:

“There are still many difficult decisions ahead of us. We are financially in a very challenging place, and we will be asking government for a level of capitalisation direction which has never before been made by a local authority.

“I accept the Government intervention; understand why they feel it is necessary and I look forward to welcoming the commissioners to Slough and working with them.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Property investments led council into debt | LandlordZONE.

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LATEST: Councils begin government-funded EPC clamp-down on rental properties

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Mansfield District Council is one of the first councils to drive improvements at private rental properties that don’t meet minimum energy efficiency standards after winning a £90,000 government grant.

It is one of 59 local authorities in England and Wales who have shared £4.3m in funding from the Department of Business Energy and Industrial Strategy to help them enforce the law.

The cash has allowed Mansfield to hire two enforcement officers, along with administration support, to target landlords with failing properties in a project that runs until the end of March 2022. It is to target 166 properties.

EPC rules

Since April last year, privately rented homes must meet a minimum energy performance rating of EPC band E, making it illegal to rent out homes below that unless landlords have a limited exemption.

The project will give landlords advice on loft insulation, cavity wall insulation and double glazing, but lack of action could result in a fine of up to £5,000 per property and per breach.

Councillor Marion Bradshaw, portfolio holder for safer communities, housing and wellbeing, says although it has identified 166 homes, it suspects the actual number is much higher.

“We prefer to work with landlords to improve standards rather than wave a big stick at them. However, enforcement action is an option if landlords choose not to engage with the project,” says Bradshaw.

Midlands Energy Hub, a BEIS-funded agency that works with local authorities to help deliver the government’s Net Zero Strategy, is supporting Mansfield Council’s project. 

Michael Gallagher, head of the hub, says: “Through improving the quality of housing stock, the whole project looks to target over 95,000 of the worst-performing private rented homes with the ultimate aim of tackling fuel poverty and reducing carbon emissions produced by the domestic housing sector.”

Nottingham, Kings Lynn & West Norfolk and Exeter councils are among those to have also received funding.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Councils begin government-funded EPC clamp-down on rental properties | LandlordZONE.

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60% of landlords used savings to plug gaps left by tenants in arrears during Covid, says NRLA

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Most landlords who handed tenants rent reductions during the pandemic absorbed the losses from their savings, according to new research.

A National Residential Landlords Association (NRLA) poll conducted by BVA/BDRC reveals that 61% of those landlords who offered at least one tenant a rent-free or deferred rent period in the second quarter of the year, had used their savings.

With recent YouGov figures suggesting that 61% of landlords rent out just one property, while 34% are retired with rental income representing all or part of their pension, the NRLA has warned that reliance on landlord savings is not sustainable in supporting tenants facing rent problems.

Government data shows that in April to May this year, 7% of tenants in England were behind with their rent – more than double the number who said they were in arrears in 2019/20, before lockdown measures started.

NRLA chief executive Ben Beadle says sustaining tenancies at the expense of retirement savings cannot continue indefinitely.

He adds: “After months of calling on the government to help tenants who, through no fault of theirs got behind with their rent, we have welcomed the funding now made available to help those affected to pay off Covid rent debts.

“It is now vital that councils ensure tenants who need it can access the funding swiftly. Without this, landlords will be left between a rock and a hard place, either expected to sustain rent arrears they cannot afford or to repossess their properties, neither of which we want to see.”

Last month, the government launched a new £65 million fund for councils to help vulnerable tenants pay off Covid-related rent debts.

Read more on ‘who pays for rent arrears debt’ mountain.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – 60% of landlords used savings to plug gaps left by tenants in arrears during Covid, says NRLA | LandlordZONE.

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