Webinar: Evictions expert to give landlords free advice tomorrow morning

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Landlords seeking advice and the latest information from the coalface on the evictions front should log-on at 9.30am tomorrow morning to the latest Goodlord webinar.

Free for those who register, it features evictions expert Tim Frome, Legal Director at Landlord Action, who will provide clarity on evictions at the moment for landlords.

If any are unsure of what has changed recently, they can be forgiven for not knowing.

The rules on evictions and the procedures required to enact them have changed on an almost weekly basis in recent months.

These have followed the twists and turns of Covid, which have seen the government execute several U-turns as it has moved England both into the first lockdown, into the later tiered regional system, out again and now back into a national lockdown.

Rapid change

This has had meant rapid change for those seeking possession orders via the courts, issuing Section 21 or Section 8 notices and instructing county court or High Court bailiffs to complete evictions.

Frome’s webinar session, which will be co-hosted by Oli Sherlock, head of insurance at Goodlord, promises to provide clarity.

“It is more important now than ever to fully understand the eviction process,” says Frome.

“The rules have repeatedly changed over the last nine months and we are still in a transitional period with amended time periods for giving notice.

“I recommend you listen in to the webinar to hear the latest on what you need to do if you need to get your property back and what is happening on the ground in current cases.”

Register here to attend.

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Demand for rented property jumps by 20%, says Zoopla

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The squeeze on mortgage lending, renters’ reassessment of lifestyle priorities and students returning to university have all prompted demand for rented property to rise 20% year-on-year across most UK cities.

This is pushing average rents up by 1.7% to £744 a month, while supply into the rental market is flat, according to Zoopla’s quarterly Rental Market Report.

However, these increases in rental prices are not being seen across the board.

Manchester and Birmingham’s average rents have dropped by 0.1% and 0.5% respectively as they, like other cities, feel the impact of office workers continuing to work from home.

Despite average rental prices falling overall by 5.2% in London to £1,596, the data reveals that most Londoners aren’t desperate to escape the capital – in fact, the proportion looking to stay in the city has risen compared with last year. 

Gráinne Gilmore (pictured), Zoopla’s head of research, says that for most of the UK, the demand/supply gap is underpinning moderate levels of rental growth.

“At the same time however, muted earnings growth will start to limit the headroom for rental growth in some markets.”

She adds: “The search for additional space, both indoor and outdoor, within the rental sector is also set to continue as the country goes through additional periods of lockdown.”

Zoopla also says renters’ wish lists have begun mirroring buyers’, as with renters looking for ‘gardens, parking, garages, balconies and pets’.

And as they yearn for outdoor space and the freedom to cope with lockdown, its finds evidence that this is speeding up the market for rented houses more quickly than for rented flats; the average time to rent a house is now 16 days, compared with 18 days for a flat.

MORE info: How to legally increase your rent.

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Retailer brings CVA process into disrepute…

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Family owned footwear retailer and manufacturer Clarks – along with many other struggling retailers – recently entered into talks with its landlords about store closures and rent cuts.

Tensions are now running high between shop-owners and tenants over what landlords see as unfair tactics being used by tenants to avoid their legal responsibilities under their leases.

Covid-19 has brought into sharp focus what was already a retailing crisis on the high street. As the country enters another lock-down it is abundantly clear that the competitive advantage now lies with out of town supermarkets and online retailers, and it is having a devastating impact on town centres.

Clarks and its advisers went into talks with landlords to discuss a restructuring plan that would see the long established footware chain switch to a ‘turnover rent’ model for future rent payments.

The proposed deal must be approved by its landlord creditors which would take the form of a company voluntary arrangement (CVA). This is a form of insolvency and a convenient mechanism now commonly used by retailers to lose existing lease obligations, closing existing uneconomic stores, while retaining the core of the business operation on a reduced scale.

However, landlords are now accusing Clacks and its advisors of abusing the CVA insolvency process, presenting landlords with a fait accompli: pushing through a restructuring plan that landlords have little chance of overturning.

What has raised the ire of the landlords, large and small, is the fact that Clarks, a private limited company, has continued to pay out dividends to its family member shareholders.

Clarks is a 195-year-old manufacturer and retailer of shoes which are familiar to almost every family in the UK where its products have been worn by infants to OAPs for generations. It remains largely owned by descendants of Cyrus and James Clark who founded the business in Somerset nearly 200 years ago.

The Clarks CVA launched last week will result in most of its 320 UK high street stores moving to turnover rents, while 60 of its estate will move to zero rents, and all the arrears built-up during the pandemic will be written off to the detriment of landlords.

According to the Sunday Times the Clarks’ CVA process has been compromised because the total of £160m debt owed by Clarks, almost exclusively to its landlord creditors, has been voted through when they have only 25% of the votes, and a CVA needs 75% of the votes to pass.

A Hong Kong-based private equity firm, LionRock Capital, has come in with an offer of £100m in financing for a majority stake in the Clarks business, on the condition the CVA is approved and is passed without legal challenge. LionRock’s injection of the funds into Clarks business is seen as critical to securing the company’s future.

The British Property Federation (BPF), an organisation which represents commercial landlords, had previously launched an attack on the fashion retailer “New Look” for what it referred to as ‘weaponising’ CVAs simply in order to cut its costs.

Melanie Leech, BPF’d chief executive, has been reported as saying:

“The BPF supports a rescue culture for businesses in distress – including CVAs, which were designed to support a struggling business back onto its feet, with store closures and rental discounts, as part of a wider restructuring to safeguard the business’ future.

“It is in property-owners’ interests to support tenants working hard to create a sustainable future for their business.

“The CVA process, however, is increasingly being used by businesses to simply walk away from debt owed to creditors, including local authorities, and to rip up leases freely agreed with property owners, without the business addressing its wider issues. This abuse must stop.”

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New normal has hit London rental market – Hometrack

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The latest Hometrack Rental Market report for quarter 3 2020, based on data from Zoopla, is indicating that while annual rental incomes are on average for the whole of the UK up  1.7% the London market has fallen 5.2%.

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Landlord blasts council’s ‘pitiful’ handling of rule breaking within HMO sector

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Winchester City Council has taken a battering for its “pitiful” policing of HMO licensing.

Local labour party member Peter Rees says the Liberal Democrat-run council isn’t taking enough rogue landlords to task or properly staffing its licensing department.

He points to two recent cases of landlords who were prosecuted for not having an HMO licence, including that of Gurjiven Singh Chhokran – reported by LandlordZONE last month – who was handed a £28,000 rent repayment order for having an unlicensed seven-bed student HMO.

A first-tier tribunal ruled it couldn’t prove Chhokran’s claim that he had tried to get a licence.

“Enforcement and the policing of HMOs has become almost a joke that has allowed rogue landlords to flourish without proper monitoring and regulation,” Rees tells The Hampshire Chronicle. “The failure to act as the local authority is pitiful.”

He says the council only has four staff engaged in both monitoring and planning issues – two full-time and two part-time – as two other staff have left and weren’t replaced.

“Both the previous Tory administration and the Lib Dems have ignored the scale of rule and law breaking in this sector,” adds Rees (pictured).

“There are numerous examples of similar cases but it has not bothered to increase its enforcement to normal staffing levels or raise perpetual issues requiring enforcement action.

“There is clearly significant exploitation by landlords of students, the very low paid on zero hours and others. This is compounded by lack of interest from the previous and current administration.”

LandlordZONE has approached Winchester City Council for comment.

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Airbnb all but closes down for lockdown and says sorry to landlords

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Airbnb is curbing all stays in England until 2^nd December apart from long-term bookings made for specific reasons, vindicating many of its landlords’ recent switch back into more traditional lets.

While staying away from home overnight is outlawed during November, those guests booking long-term legally exempt stays can still use the homestay platform, including those travelling for work or those who are homeless or vulnerable.

Director of public policy, Patrick Robinson (left), says the move mirrors Airbnb’s actions during the first lockdown.

“As new lockdown restrictions begin, we want to be a good partner to communities and we’ve heard from hosts who want to help everyone follow the rules and stay safe,” says Robinson.

“Public safety is our priority, and we regret any impact for hosts and guests.

“We will closely monitor government guidance and keep the policy under review, and we look forward to when hosts can safely reopen their doors to guests.”

Party house clampdown

Meanwhile, Airbnb has announced that more than 800 UK listings have been removed or suspended in a crackdown on party houses.

It has also blocked more than 13,500 UK reservation attempts in a month after the introduction of a pilot scheme to tackle anti-social behaviour in August.

Its self-imposed crackdown on party houses bans under 25s from renting entire homes in their local area. Youngsters with fewer than three positive reviews can’t book entire home listings that are close to where they live in the UK.

Robinson adds: “Our measures are working and as the UK goes back into lockdown, our priority is to be good partners to communities and to help everyone stay safe.” 

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New lockdown won’t interrupt housing market, says leading economics expert

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A leading economics expert has told landlords that the current month-long lockdown is not going to prompt the same economic downturn seen during the first one earlier this year.

David Smith (pictured, above), who has been the economics editor of the Sunday Times since 1989, told online delegates to the National Landlord Investment Show that in economic terms the new lockdown is less restrictive than the first one.

“We’re not going to see the kind of big falls in GDP that were witnessed during the first lockdown,” he says.

“GDP shrank by 20% during the second quarter of the year before rebounding, but this time is will be more like 3%.”

Recovery

Smith says that although the second lockdown may slow down the remarkable recovery of the housing market since it reopened in May, it won’t prompt a reversal in activity, house prices and rents.

“Despite its miss-steps on several fronts, the government remains serious about supporting the housing market,” says Smith.

“This includes the extension to the furlough scheme which will reduce one of the major downside risks [for landlords] – a sharp increase in unemployment.”

Smith is also confident that the rental market, with the exception of London where rents are due to soften significantly, will weather the storm until next year, when he expects to see a strong economic recovery.

His comments were echoed during the show by Paul Maloney of Nova Financial, who believes existing predictions that house prices are still on track to rise over the next five years after a six to 18-month hiatus while the housing market recovers from Covid.

Watch David Smith’s presentation in full (requires registration).

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UK rented homes underinsured by £315 billion

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Landlords struggling in the wake of COVID-19 face another invisible threat in the form of underinsurance.

The latest data from RebuildCostASSESSMENT.com reveals a massive shortfall in cover among rented homes and business properties. The insurance valuation providers estimate that privately rented homes in Britain could be underinsured by a whopping £315 billion, while for UK commercial property, the estimated underinsurance total is around £325 billion.

“What this means is buildings across the country are woefully under-protected in the event of any kind of damage,” said Will Molland BSc MCIOB AssocRICS, director at Rebuild Cost Assessment Ltd.  “I fear that in the current financial climate many landlords simply would not survive the consequences of underinsurance.”

Will went on to explain that nine out of 10 properties in the UK are insured for the wrong amount. The vast majority (79%) are underinsured, which means that when a claim is made, the amount paid out to cover the damage can be severely reduced.

“We’ve recently seen with the situation around business interruption cover that insurance contracts can lead to confusion. Underinsurance often leads to disputes with insurers. On average, we find that buildings are only covered for 69% of the amount they should be, leading to a considerable shortfall in cover.”

Will added: “Now is not the time for anyone to discover their insurance policy won’t pay out the amount they’re expecting. This is a UK wide problem and it can only be resolved by landlords realising the risk they’re running and then making sure their buildings are insured for the right amount.”

RebuildCostASSESSMENT.com has recently produced an infographic highlighting its latest data around inaccurate buildings insurance, based on more than 11,000 property assessments over the past 12 months. It can be viewed and downloaded here.

We have partnered with property experts Hamilton Fraser Total Landlord Insurance to provide you with a webinar on ‘How to avoid underinsurance’ which will cover everything you need to know on the topic, from calculating your rebuild value to the true cost of underinsuring – look out for the webinar which will be going live on the 16 November 2020. Viewers will have exclusive access to a RebuildCostASSESSMENT.com discount code.

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Are my rental expenses from the LAST tax year allowable in THIS year’s return?

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We moved out of our home on 1st February 2019. Since December 2018, we had advertised the property to let from 1st Jan 2019, and put everything in place to satisfy our mortgage lender’s demands (landlord insurance etc) when we applied for ‘permission to let’

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LATEST: Flooding report recommends landlords be forced to offer tenants more insurance cover

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Landlords of properties in flood risk areas should be forced to offer tenants more support following a flood and upgrade their insurance to offer tenants more cover, a report into last year’s extreme weather events has recommended.

Lead by insurance industry chief Amanda Blanc (right), the report focusses on the flooding in South Yorkshire last year but has recommended changes on a national level.

Her report, commissioned by the government, reveals shocking differences in cover between home owners and renters.

While 95% of home owners canvassed had adequate General Insurance in place, only 45% of tenants in Doncaster had taken out contents insurance of any kind.

When asked about specific flood insurance, nearly three quarters of owners confirmed that they had either buildings or contents insurance that covered flood damage.

But only 25% of tenants said they had contents insurance that covered flood damage.

The report therefore calls for landlords to be compelled to inform tenants about their buildings insurance and what to do if a flood occurs; and legislate to force landlords to have policies that offer tenants alternative accommodation if they are ‘flooded out’ for an extended period.

“This Review is essential in identifying some of the barriers that are in place for residents in high flood risk areas and understanding how we can take positive action to improve the protection available to residents moving forward,” said MP Rebecca Pow (left) when launching the report in Parliament.

Ministers are expected to act on the recommendations ‘in due course’.

Read the report in full.
Read more about insurance and flooding.

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