CLADDING: Landlord reveals nightmare of being caught up in building safety scandal

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A landlord caught up in the ongoing cladding scandal faces the agonising decision of whether to take a huge hit on the sale of his flat or evict his tenants and move back in and live without his partner.

He can’t re-mortgage the one-bed flat in Colindale, London, as he’s unable to get an EWS1 form due to the large amount of HPL and timber cladding, timber balconies and missing cavity barriers on the sub-18m block.

His two-year fixed rate residential mortgage with Principality Building Society is up at the end of next month but it has told him he can’t get a buy-to-let mortgage without an EWS1.

“I was given a ‘consent to let’ before renting the flat out,” he tells LandlordZONE, “and this added 1% to my interest rate. They’ve now told me they’re unable to continue with the current arrangement but when I raised the point that the property is already on their books anyway they refused to proceed with my BTL application.”

Difficult choice

The landlord – a member of UK Cladding Action Group – has since tried more than 10 other mortgage brokers without success. He’s now stuck with a difficult choice: settle the remaining balance of £165,000 by 30^th June, evict his tenants, sell to a cash buyer at a huge discount or allow Principality to repossess the flat and walk away from years of equity he has built up over the last four years.

“I can’t afford to pay the balance,” he explains. “My tenants are a young hardworking couple who have been absolutely golden.

“If I moved back into the flat to get a residential mortgage it would mean living apart from my long-term partner, so breaking up a family and doubling the cost of living for us as a couple.”

Like thousands of others hit by the cladding scandal, he has no idea when the remedial works will be carried out or how he’ll pay for it. He adds: “In the meantime, I’m staring at losing my financial security I worked so hard to achieve, having done nothing wrong.”

The government has trebled the fund to fix dangerous cladding to £5 billion but there is no support for hundreds of sites like these with non-cladding related defects, such as defective cavity barriers.

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Queen’s Speech: Government commits to banning Section 21 evictions once more

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The government has promised to enhance renters’ rights in the Queen’s Speech – 18 months after she first announced the Renters Reform Bill.

It will mean the demise of Section 21 ‘no fault’ evictions and a stronger Section 8 notice process, and should usher in a national scheme of ‘lifetime deposits’ for tenants and reform or abolish Assured Shorthold Tenancies.

Many housing groups hope the proposed legislation will be introduced in this parliamentary session, however there’s still no timeline; in March, Housing Minister Christopher Pincher said the government would “implement the reforms at the appropriate time, once the urgencies of responding to the pandemic have passed”.

Paul Shamplina of Landlord Action, says: “It was expected that the Queen would make reference to the Renters Reform Bill; I’ve been predicting for a while that Section 21 will be abolished in the next 12-18 months, but there has to be reforms of the Section 8 Grounds and major investment made in the Court System coupled to bailiff reforms, especially in the wake of Covid and the lengthy evictions ban”.

The Queen’s Speech also included a promise to end the practice of ground rents for new leasehold properties.

Many leaseholders face high charges increased by freeholders over the years, making selling a leasehold property with these conditions attached extremely difficult.

Grenfell

In reference to the Grenfell fire, the government announced a new building safety regulator to ensure that the tragedies of the past are never repeated.

It also vowed to modernise the planning system so that more homes can be built and – following on from the Budget which offered incentives for house buyers – will help more people to own their own home.

It plans to spread opportunity across the UK and deliver a national recovery from the pandemic.

The Queen said: “To achieve this, my government will level up opportunities across all parts of the United Kingdom, supporting jobs, businesses and economic growth and addressing the impact of the pandemic on public services.”

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EXPERT VIEW: Has Covid changed the student lets market?

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It has been a difficult year for many students, with limited contact hours on campus from the outset, followed by the strict January lock down, which will keep many away from in-person lectures until September.

While some students are disappointed and are turning their attention to securing tuition fee refunds, the student housing market remains robust, particularly for landlords and agents specialising in shared student housing.

They’re back!

Students can return to campus from the 17^th of May, however, the majority of students anticipate being back on campus this September, with our recent research revealing that almost 90% are of this view.  

Furthermore, there is confidence that the strong vaccine programme and well organised Universities will mean students can enjoy a relatively normal academic year from this autumn.

As a result, accommodationforstudents.com has experienced a 37% increase in website visitors and a 59% increase in page views in the first four months of 2021.

This positive trend is supported by a 15% increase in enquiries through the site, as confident student populations seek to secure their accommodation for next academic year.

Students willing to commit  

One of the main features of 2021 has been a growth in interest in HMOs and shared housing. In the first four months of the year our landlord properties had received over 1 million views and benefited from a 39% increase in enquiries.

Whilst our latest research revealed that 20% of students had delayed making accommodation choices for 2021 because of Covid 19, this delay primarily seems to have affected the PBSA sector where a sharp growth in bookings in anticipated in the later summer months.

Students were willing to commit to a shared housing from the outset and this is positive news for those landlords and agents.

Growing student numbers

The outlook remains positive, with 616,360 applications for a University an 8% increase and the most ever received. Within this there is a strong domestic cohort of 306,200 18 year olds. This is  over 40% of the UK’s population of 18 year olds and is a result of the continued appeal of UK Universities as well as an established trend towards further study at times of economic uncertainty.

While this is good news, it is particularly positive for landlords, as it likely to increase the market for shared housing. Our research shows that most students view living in shared housing as a key part of the University experience and that the majority (64%) thought that it was the best type of accommodation to live in.

Price, location and bills

So while the overall picture is positive, with a healthy audience and appetite for student accommodation, it is still competitive. Our recent research reveals the key factors in the students’ decision making are price and location (either in relation to the University or amenities).

The availability of bills inclusive rents is also important to many students and something that has become increasingly easy to offer. With these key elements in place and a strong online profile, there is a sustainable and growing market available to target.     

Simon Thompson is CEO of AccommodationForStudents.com.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – EXPERT VIEW: Has Covid changed the student lets market? | LandlordZONE.

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STUDENT shared HMO housing remains robust despite Covid

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It has been a difficult year for many students, with limited contact hours on campus from the outset, followed by the strict January lock down, which will keep many away from in-person lectures until September.

While some students are disappointed and are turning their attention to securing tuition fee refunds, the student housing market remains robust, particularly for landlords and agents specialising in shared student housing.

They’re back!

Students can return to campus from the 17^th of May, however, the majority of students anticipate being back on campus this September, with our recent research revealing that almost 90% are of this view.  

Furthermore, there is confidence that the strong vaccine programme and well organised Universities will mean students can enjoy a relatively normal academic year from this autumn.

As a result, accommodationforstudents.com has experienced a 37% increase in website visitors and a 59% increase in page views in the first four months of 2021.

This positive trend is supported by a 15% increase in enquiries through the site, as confident student populations seek to secure their accommodation for next academic year.

Students willing to commit  

One of the main features of 2021 has been a growth in interest in HMOs and shared housing. In the first four months of the year our landlord properties had received over 1 million views and benefited from a 39% increase in enquiries.

Whilst our latest research revealed that 20% of students had delayed making accommodation choices for 2021 because of Covid 19, this delay primarily seems to have affected the PBSA sector where a sharp growth in bookings in anticipated in the later summer months.

Students were willing to commit to a shared housing from the outset and this is positive news for those landlords and agents.

Growing student numbers

The outlook remains positive, with 616,360 applications for a University an 8% increase and the most ever received. Within this there is a strong domestic cohort of 306,200 18 year olds. This is  over 40% of the UK’s population of 18 year olds and is a result of the continued appeal of UK Universities as well as an established trend towards further study at times of economic uncertainty.

While this is good news, it is particularly positive for landlords, as it likely to increase the market for shared housing. Our research shows that most students view living in shared housing as a key part of the University experience and that the majority (64%) thought that it was the best type of accommodation to live in.

Price, location and bills

So while the overall picture is positive, with a healthy audience and appetite for student accommodation, it is still competitive. Our recent research reveals the key factors in the students’ decision making are price and location (either in relation to the University or amenities).

The availability of bills inclusive rents is also important to many students and something that has become increasingly easy to offer. With these key elements in place and a strong online profile, there is a sustainable and growing market available to target.     

Simon Thompson is CEO of AccommodationForStudents.com.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – STUDENT shared HMO housing remains robust despite Covid | LandlordZONE.

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Tory MP: Why I’m hoping for a Renters Reform Bill announcement tomorrow

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The demise of Section 21 ‘no fault’ evictions is set to come a step closer with the expected announcement of the Renters Reform Bill in tomorrow’s Queen’s Speech, a leading Tory MP has said.

First revealed in 2019, the bill will also bolster the Section 8 notice process, usher in a national scheme of ‘lifetime deposits’ for tenants, and reform or abolish Assured Shorthold Tenancies.

Writing in The Times, Conservative MP Nickie Aiken (pictured) said she expected to see it revived and able to make fundamental changes to help fix renters’ problems and strengthen their rights.

The Cities of London and Westminster MP said it needed to remove the “arbitrariness of evictions” and create a system less skewed in favour of landlords by abolishing Section 21.

“I have immediate family who have moved from the security of homeownership to the private rented sector,” said Aiken.

“Like many families in similar situations, the precarious nature of the sector is striking.

“Poor living standards and regulatory problems are an all-too-familiar reality for many renters. Even the best tenants have little protection from being ousted from the place that they call home.”

Unsettling

She added: “It is unsettling that eviction can happen to virtually anyone through the powers of Section 21 notices.”

Aiken pointed to a new YouGov poll that showed 76% of people think landlords should not be able to evict tenants without giving an acceptable reason.

She said that while it was clear the market has seen some seismic shifts, legislation has been slow to keep up or even respond to these changes.

“The abolition of Section 21 is the start but we need to do more to support our renters to give people a stake in the property market and assure them with long-term security.”

She added however, that it was important to recognise that any changes should not take away from a landlord’s right to regain possession of their property when tenants are at fault.

Read Aitken’s comments in full (requires subscription).

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Tory MP: Why I’m hoping for a Renters Reform Bill announcement tomorrow | LandlordZONE.

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How liable would we be in the case of a fire?

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I am a Freeholder and Shared Freeholder of two Victorian conversions, each with 3 flats over 3 storeys including the ground floor.

Whilst we abide by standard fire safety rules for example 30 minute fire doors, wired smoke alarms

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Capital gains tax tips on family gifted property?

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My wife has a part-time job earning 12,000. Her mother signed over her house in 2002 giving half to my wife’s sister and half to my wife.

My wife’s mother died in February, and they decided to sell the house.

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Tom’s view: ‘This is the biggest home building boom we’ve seen for many years’

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Although Covid has hit the property sector hard, it’s adapting fast and construction is growing – but there will be winners and losers, says Tom Entwistle.

Covid has not been all bad news for UK property: working from home and lockdown restrictions have produced a boom in DIY and home improvement works, while the desire for more space has seen relocation enquiries with the property portals go through the roof. Foreign travel bans have resulted in a boom on the demand for UK holiday accommodation and moves toward suburban / rural rentals.

Britain’s construction sector is also seeing its biggest increase in work in five years. With strong demand for housing and with other projects resuming full working, as the coronavirus pandemic eases, the building industry has not be busier for some time.

Impact of the pandemic

The downside to all of this, as the impact of the pandemic, coupled with Brexit, becomes clear, is the impact on the demand for rentals in inner cities, and the shortage of building and other products and building materials which many economic experts warn is resulting in price inflation.

The lock-down induced DIY and home improvement boom are giving a real boost to companies involved in materials supplies, such as builders’ merchants and furniture stores. Logistics and warehousing companies involved in home deliveries have never busier as people continue to work from home and use their travel savings on this alternative spending.

A Royal Institution of Chartered Surveyors (RICS) survey of its members predicts that profit margins in the building sector will increase for the first time since well before the pandemic as the volume of work continues to rise over the coming months.

RICS Chief Economist Simon Rubinsohn (pictured) says: “The indications are that the (building) industry has adjusted relatively well to COVID-related work practices with most respondents to the survey suggesting only a small hit to productivity,”

Residential Boom

In late 2020 early 2021 private residential construction has seen the biggest rise in construction work, followed by infrastructure projects as the government gears-up to fulfil its election promises on increasing spending on infrastructure, especially in the north. Social housing, public-sector works and industrial and commercial projects have all seen increases in activity levels.

The RICS survey which was undertaken over the last couple of months shows that Britain’s property market has performed much more strongly than the wider economy. It’s a result that the RICS largely puts down to the Stamp Duty holiday on house purchases and a sudden rise in demand for larger homes as people look to move out from city centres to properties more suited to home-working.

The pandemic has also resulted in a clear shift in demand away from flat shares with a group of strangers, the traditional first move into city work-life, to rentals as singles, with partners or even returning to live with parents.

Material shortages

The IHS Markit’s Purchasing Managers’ Index for the construction industry shows the biggest rise in activity in the sector since 2014, but RICS points to the shortages in the supply of building materials as the biggest constraint on construction, rather than anything to do with financing difficulties.

The RICS study found the productivity in the sector was down by 5% due to social distancing involved in the Covid work restrictions for workers. However, this, it says, was a smaller impact than surveyors had expected as the lock-down working rules were introduced, and the recent recovery appears to be more than making up for that.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Tom’s view: ‘This is the biggest home building boom we’ve seen for many years’ | LandlordZONE.

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PROFILE: Meet the Labour’s new shadow housing minister who’s also a landlord

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New shadow housing minister Lucy Powell – who has called for tougher PRS regulations – is a landlord herself.

The MP for Manchester Central is in favour of secure tenancies for life and creating more regulation for HMOs but should have a good understanding of the sector’s challenges as she rents out a room in her London flat.

She is also a shareholder and director of New Road Management which owns the freehold of six flats in Camberwell, where she lives.

Powell, an MP since 2012, replaced Thangam Debbonaire following Keir Starmer’s post-election reshuffle, and has been vocal in parliament about PRS shortcomings during the last decade.

In the debate on the Housing White Paper in 2017 she said: “By far and away the worst-quality housing in Manchester is in the private rented sector.

Broken market

“It is unfit for human habitation, infested, damp and dirty, and it is being paid for, by and large, by the taxpayer through housing benefit. When will the Government intervene in that broken market?”

In the past she’s called for a licensing scheme in the city and believes Airbnb and similar short let platforms are creating a serious problem in central Manchester, damaging neighbours’ lifestyle and neighbourhoods.

She’s endorsed the Labour policy of further relaxing the planning rules on building new homes and recently backed a rent to buy development in Openshaw where the rent is significantly reduced to allow tenants to save up to get a deposit to buy part or all of the house over five years.

Powell has regularly spoken out to get the government to support leaseholders in her constituency who are trapped in Grenfell-style flats.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – PROFILE: Meet the Labour’s new shadow housing minister who’s also a landlord | LandlordZONE.

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Lucy Powell is new Shadow Housing Secretary

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Following the massive election disappointments in England last week, Sir Keir Starmer’s shadow cabinet reshuffle has included replacing Thangam Debbonaire as Shadow Housing Secretary with Manchester MP Lucy Powell.

Lucy Tweeted: “Really pleased to become the Shadow Housing Secretary –

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