ANALYSIS: From dark kitchens to e-bike rentals, here’s how retail landlords are surviving

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As shopping centre values are hit by the decline in retail and a COVID induced home delivery trend, landlords are desperate to find alternative uses for redundant space, reports Tom Entwistle.

One company backed by Softbank, an international tech focussed venture capital fund, is offering shopping centre owners a possible solution to their problems.

Reef technology claims to transform under-utilised shopping centre space and car parks into fulfilment centres, neighbourhood kitchens, urban farms and e-scooter rental stations.

Creatives measures

Challenging times call for creative measures and perhaps there’s nothing much more challenging than revitalising a dead or dying neighbourhood shopping centre. This is one solution that just might work.

Miami based Reef Technology has signed a deal with Capital and Regional malls, a stock market listed-landlord with seven shopping centres around London.

Reef was originally a car parks management company trading as ParkJockey, and has since expanded its package into storage and fulfilment for home deliveries, with its own three-wheel Reef branded e-scooters for home deliveries.

Dark kitchens are where local restaurants and new food brands can prepare food for local delivery, and urban farms are there to market locally grown and environmentally-friendly produce.

Electric performance

Alternative uses can be added in the future including stations for e-bikes, electric vehicle (EV) charging points, and e-scooter rentals.

The $700million funded Reef already operates 4,500 locations in the US and Canada and has raised a further $300million from private equity investment specialists Oaktree Capital Management (which recently tried to buy estate agency giant Countrywide) to enable it to acquire strategic property assets.

It has been estimated that in the UK 16,000 shops closed for good last year and approaching a further 1,000 have closed already in 2021. In addition, landlords have been confronted with billions of pounds of lost or deferred rent payments since the start of the pandemic last year.

Glimmer of hope

Reef’s arrival therefore offers at least a glimmer of hope for shopping centre landlords, and an insight into how they can adopt a diversification strategy that has been proven to work.

Reef‘s MD Europe, Barak Zimerman, told The Times newspaper: “The need to adapt and transform retail has never been greater” Our platform will help Capital & Regional “drive its assets recovery as businesses evolve post-pandemic”.

Pic credit: Paul Wilkinson, Flickr.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – ANALYSIS: From dark kitchens to e-bike rentals, here’s how retail landlords are surviving | LandlordZONE.

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Tenant who illegally sub-let her flat is treated by court as rogue landlord

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A tenant who illegally sub-let her flat as an HMO has, somewhat ironically, been convicted of being a rogue landlord.

Sonia Nascimento rented a converted, four-bedroom flat in St Pauls Avenue, London, in 2017 but went on to let the property to eight other tenants for a profit.

She has now been ordered to pay more than £9,000 in fines and costs for multiple housing breaches after Willesden Magistrates Court heard how a lack of smoke alarms and fire safety system put all the tenants in danger, including a four-month-old baby.

One of the tenants reported Nascimento to Brent Council’s private housing services last July, revealing that none of them had a tenancy agreement or had used a government-approved deposit scheme.

An inspection revealed that the property had no HMO licence and that Nascimento, who did not live in the flat but was ‘head tenant’, was in breach of housing management regulations.

The owner of the property, who paid occasional visits to the flat, was issued with a £2,500 civil penalty notice for failure to licence.

Taken to court

Nascimento was given a £5,000 community protection notice, but when she failed to pay it, the council took her to court.

Councillor Eleanor Southwood (pictured), lead member for housing and welfare reform, says: “Landlords who fail to license their properties or who are not following housing management regulations are breaking the law.

“Safety of tenants is our priority and we encourage anyone who suspects that their landlord may be acting outside the law to report their concerns to us.”

Read more about HMO tenancies.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Tenant who illegally sub-let her flat is treated by court as rogue landlord | LandlordZONE.

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I did not realise even insurers held us in such contempt?

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I just applied for Home Insurance with Hiscox, I was declined because I am a Landlord!

I made it clear it was for my home only, but it made no difference.

I did not realise even insurers held us in such contempt.

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Why UK Property Prices Will Rise in 2021

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I correctly predicted last year, that there would be no housing market crash in 2021.

In this update, I consider some key announcements from the Budget and state why I feel property prices will rise in 2021 and beyond.

The post Why UK Property Prices Will Rise in 2021 appeared first on Property118.

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EXCLUSIVE: What the broken evictions system means for landlords when tenants go ‘nightmare’

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Landlord couple Udayanga Vitharana and Kumari Sujantha have been let down by their letting agent, legal representatives, the benefits system and the courts in their attempt to evict a wayward tenant.

The woman stopped paying rent last April but has been running a beauty business from the house in Crawley, Sussex where she has hosted clients during lockdown.

She’s been exploiting the benefits system by falsely claiming extra Universal Credit and also blocked the couple’s three attempts to apply for an Alternative Payment Arrangement.

The tenant now owes the couple more than £14,000 in rent, but last week a court threw out a Section 8 notice they had issued in May after the unlicenced legal firm representing them omitted to tell the judge vital facts in the case and provide important paperwork. They found out months later she had paid £50 to their account just before this without telling them, to ensure she wasn’t two months’ in arrears.

Udayanga tells LandlordZONE that the tenant is using benefit and legal loopholes to stay in the three-bedroom property. He has no idea when they will get another court date – and in the meantime, they’re trying to pay two mortgages. “This issue has been very difficult for us mentally and physically over the past 10 months,” he says. “I suffer from a chronic illness and the stress caused by this is affecting my wellbeing.”

False references

The couple discovered she had given false information on her reference form which hadn’t been picked up by online lettings agency Open Rent. “She said she worked for a non-existent company,” says Udayanga. “We only wanted a professional person and wouldn’t have signed the contract if we’d known her situation – I expected more thorough checks.”

OpenRent says the couple’s complaint is being handled by its team. Founder Adam Hyslop tells LandlordZONE: “They are in dialogue with the customer and our referencing provider to determine what went wrong and propose a resolution to the customer based on those findings.”

The landlord couple then found out she had been claiming benefits for months – and it also transpired she was claiming for two people, receiving £750 instead of £480. The DWP is now investigating benefit fraud. “We finally started receiving direct payments in October but it doesn’t cover our mortgage,” he says.

Their tenant has refused access to the property since May and, as a result, an evaluation request was declined. “By doing so, she prevented us from getting a better re-mortgage deal,” adds Udayanga. “We are so fed up – we just want our house back.”

Read more about the problem of unlicenced legal firms.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – EXCLUSIVE: What the broken evictions system means for landlords when tenants go ‘nightmare’ | LandlordZONE.

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Nerve agent house to be sold with unusual sub-let rental clause

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The property in Salisbury where former Russian spy Sergei Skripal and his daughter Yulia were poisoned is to be bought by the local council and then sold with an unusual rental restriction attached to the property, it has been revealed.

The Skripals bought the 1990s-built detached house for £260,000 in 2011 but the address become notorious after the Skipals were poisoned in 2018 by deadly Novichock nerve agent that had been sprayed on their front door by two suspected Russian intelligence officers.

The pair survived the suspected assassination attempt although local women Dawn Sturgess, who unintendedly came into contact with the discarded bottle used in the attack, died.

After 32,000 hours of deep cleaning by a specialist team that saw the property cordoned off for months, it has now been bought by Wiltshire County Council in consultation with its neighbours.

Sub-letting clause

The property is to be offered via a shared ownership scheme and include a sub-clause in its sale contract that will prevent future owners sub-letting the property out including via short-let platforms such as Airbnb.

This, it is understood, is to deter future owners from cashing-in on ghoulish holiday makers seeking to stay at the property.

Leader of the council Philip Whitehead (pictured) told the BBC: “It will be good to see this house used as a home again.

“During the coming months, we will rebuild and refurbish the property to bring it back into use as a home, and to protect local residents, we will ensure that the property will not be used for anything other than a home.”

Another property in Salisbury, where Sturgess lived with her partner, was knocked down last year.

Renting out homes via short-lets platforms is becoming more difficult for owners including, as we reported last year, because insurers are stipulating that owners will be invalidating their homes and/or contents insurance if they do so.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Nerve agent house to be sold with unusual sub-let rental clause | LandlordZONE.

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LATEST: Widespread ignorance of who pays for property repairs revealed

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Renters spend an average of £443 on repairs that should legally be paid for by their landlords, according to insurance search engine Confused.com.

One in five (19%) tenants admit they’re unsure about precisely who is responsible for repairing a rental property.

Its research found that 22% tenants had paid for the cost of repairs themselves, rising to 33% for those who had paid to fix plumbing issues and 23% who forked out to have electrical issues resolved. 

The study suggests that the most common problems experienced by tenants were often the most expensive to put right.

Damp and cold

The search engine found that 42% have suffered with damp, while 30% have had to cope with living in the cold when the heating broke down. More than a quarter reported having to go without the shower or toilet due to plumbing issues.

Jessica Willock (pictured), home expert at Confused.com, says: “It can be confusing to know where the responsibilities lie when landlords and tenants enter a contract, but getting clued up on who looks after what can save money, time and make for a smoother relationship in the long run.”

Landlords are legally responsible for repairs to the property’s structure and exterior, basins, sinks, baths and other sanitary fittings including pipes and drains, heating and hot water, gas appliances, pipes, flues and ventilation, electrical wiring and any damage they cause during repairs.

Adds Willock: “Importantly, you cannot be forced to carry out repairs that are your landlord’s legal responsibility, no matter what your tenancy agreement states.”

Read more about who is responsible for repairs.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Widespread ignorance of who pays for property repairs revealed | LandlordZONE.

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£6 billion housing agency accused of ‘putting numbers before quality’

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Homes England, the little-known agency set-up by the Con/Lib coalition as a ‘housing accelerator’ is be put under the spotlight by its own chairman, who has promised the government he’ll undertaken a root-band-branch re-appraisal of the organisation.

This follows a critical report by Create Streets founder Nicholas Boys Smith, who slammed the agency for ‘subsidising ugly, obsolescent, alienating homes and places’ or in other words, focussing on numbers at the expense of quality living.

In 2018 the agency was given a £70 billion five-year budget to focus on boosting housing supply in the least affordable areas. Its help-to-buy loans also helped fund they agency’s own expansion from 750 staff to 1100 over three years, now with offices in Liverpool, Leeds, Newcastle, Coventry, Bristol and London.

Although the agency exceeded its housebuilding targets in the last financial year, it has come under criticism in the report for its remit to purely promote affordable homes, and the degree of risk it has taken on with its heavy exposure to the housing market.

The Boys Smith report said that previous government housing agencies had sought to improve the quality of new homes, whereas the Homes England straddles the roles of a bank, a developer, a provider of affordable housing subsidies, and a numbers machine.

By focussing on the least affordable housing authorities, typically in the affluent southeast of England, it has meant that areas in the North of England and the Midlands, a particular concern of the current Conservative’s Red-Wall policy, was being neglected.

Levelling up?

Housebuilder Gleeson’s CEO, James Thomason (pictured) has said that: “There’s way greater need in the North of England and the Midlands. Is it really the job of Homes England to funnel quite a lot of cash into the south?”

The looming report signals a change of direction as the agency’s chief executive Nick Walkley leaves after four years at the helm, with rumours of a clash with housing minister Robert Kenrick.

The root and branch review of the agency’s role ordered by Kenrick, to be carried out by its chairman Peter Freeman, is likely to result in a change of emphasis, from boosting housing supply to regional regeneration.

However, outgoing Walkley had expressed concern about using the agency as a tool of the government’s “levelling up” agenda and that “One of the real successes of the agency has been to be really clear about what we do and what we don’t do. We have expertise, money, capability and capacity around housing and land”. But by widening the agency’s remit, he worries that this could lead to poor decision making in the future.

But it looks like politics will win out: the agency is likely to become a major contributor to the government’s “build back better” campaign, helping guide and fund regeneration in the Midlands and the North of England – the Tory Red Wall.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – £6 billion housing agency accused of ‘putting numbers before quality’ | LandlordZONE.

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Welsh government must ‘get a grip’ on rent arrears crisis, warns landlord chief

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NRLA chief Ben Beadle has called on the Welsh government (main pic) to ‘get a grip’ on the rent arrears crisis threatening to engulf the country’s private rental market by improving financial support and ending the Covid restrictions that have plunged tenants and landlords into debt.

The trade association, which represents some 90,000 landlords across both England and Wales, says Ministers must revisit its separate evictions ban, which does not allow possession orders on grounds of extreme rent arrears.

It also says the Welsh Tenant Saver Loans scheme, which enables tenants to pay landlords rent arrears, must be widened to include tenants who at the moment don’t meet its narrow creditworthiness criteria.

Ministers are also being urged to let landlords know when they can expect to return to normal notice periods for evictions – since February this year they must give tenants up to six months’ notice before moving to an eviction.

“The Welsh Government needs to get a grip of the rent debt crisis that is engulfing renters and landlords,” says Beadle (pictured).

“If action is not taken now,  there will come a time when emergency measures are finally lifted when a failure to deal with rent debt will lead to tenants having to leave their homes, facing serious damage to their credit scores.

“It is time for the Welsh Government to recognise the scale of this crisis and take urgent action to help households and housing providers.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Welsh government must ‘get a grip’ on rent arrears crisis, warns landlord chief | LandlordZONE.

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How will the spring budget affect landlords and investors? Belvoir CEO Dorian Gonsalves advises…

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Capital Gains Tax

Prior to the recent budget there was a great deal of speculation about whether Capital Gains Tax (CGT) would be increased to the same level as income tax. As we now know, CGT was not increased on budget day, BUT before landlords and investors breathe a sigh of relief, it is worth noting that on 23rd March the Government intends to publish a range of tax consultations, which may well include changes to CGT.

I believe it is likely that CGT will be increased, but I also think that any increase is likely to be phased in over a period of time, in much the same way that higher rate tax relief on mortgage and finance interest for higher rate taxpayers was reduced over a four-year period. This will give people the chance to plan their tax affairs. As CGT is a tax on profit resulting from the sale of an asset there will be many people, landlords included, who may be at the end of their investment cycle and will be particularly concerned if CGT is increased. Some sort of phased approach is certainly the lesser of two evils when compared to an immediate increase.

Corporation Tax

I think all of us of are expecting to pay more tax in the years to come, but it will be interesting to see whether Rishi Sunak uses ‘tax day’ on 23rd March to completely overhaul some elements of our tax system. This is definitely a day to look out for if you are a landlord or an investor!

In the budget Rishi Sunak said he was keen to protect small businesses with profits of £50,000 or less. To do this he has created a Small Profit Rate (SPR) of Corporation Tax, which will allow them to remain at the current rate of 19%. He claims that around 70% of all companies (1.4 million businesses) will be completely unaffected by a change in Corporation Tax. As most landlords in the UK own less than two properties (on average 1.8 properties) they are unlikely to be affected.

Although companies with profits of less than £50,000 are protected from a further increase, businesses with profits of more than £250,000 will be taxed at 25%, with a taper in between these two levels of profits. This may impact some landlords who became incorporated to take advantage of the tax benefits of a limited company. It seems clear to me that it is the Government’s intention that companies will be asked to pay the greater share of the Covid expenditure. Indeed, it may ultimately be Sunak’s intention to increase corporation tax across all companies regardless of level of profit – but this is yet to be seen.

Property prices

It is clear that property price and rents are going to increase over the next 12 months and beyond. As far as house prices are concerned, property website Rightmove reported that on the day of the budget there was an immediate spike in activity, with the number of visitors surpassing 9 million for the first time. The previous record was 8.5 million. There were two reasons for the record numbers of viewings – firstly Sunak announced that the stamp duty holiday would be extended for a further three months and would then only be applied to properties over £250,000 for another three months. In addition, first time buyers buying a property under £500,000 will be exempt from paying stamp duty.

These changes to the stamp duty holiday will help any deal that may have otherwise fallen through, or that may be in the pipeline, as buyers now have a further three to six months to complete on the deal. It may also benefit a small number of new deals on properties that are worth less than £250,000 as long as they get the deal through by the final date of 30th September 2021. The average time it takes from a property first appearing on a property portal to eventually completing is currently six months. It is therefore unlikely that a new swathe of buyers will suddenly benefit from this tapering tax in stamp duty, although some of them certainly will.

The second reason for a spike in activity is the first-time buyer incentive of the return of the 95% mortgage. This, combined with the stamp duty extension, means there will be a cohort of new buyers over the new 12 months, and it is highly likely this will lead to increased prices in most areas of the UK outside of London.

Rents

I am a landlord myself, and my ears pricked up during the budget when Sunak and Johnson made it clear that they wanted to see generation rent become generation buy. This is an admirable goal for the many renters would like to become homeowners, however property stock is limited and there are around 13 million people renting in the UK, with many of them entirely happy to stay in the PRS for life.

Due to the constant shortage of properties being built and the Government’s assault on landlords over the last five years, I think it is likely that rents outside of London will increase by between 3-5% each year for the next two to three years.

In summary, if you are a landlord and you are in this for the long-term, not only will you see your assets increase in value, but you are also likely to receive healthier returns in the short to medium term.

To find your nearest Belvoir office to receive free advice, visit: www.belvoir.co.uk

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – How will the spring budget affect landlords and investors? Belvoir CEO Dorian Gonsalves advises… | LandlordZONE.

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