Latest lockdown offers fewer restrictions for the property industry

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The latest Health Protection (Coronavirus Restrictions) (England) (No. 4) Regulations 2020 relating to the second lockdown in 2020 will be of interest to landlords and property professionals throughout the UK property industry.

Participants will remember the regime in the first lockdown when there was virtually a total shut-down for sales and lettings – buyers and sellers, landlords and tenants had months in which they could not view houses and building sites or change tenancies, and all this added to complications for exchanging contracts, completing transactions and moving in and out of homes.

However, this time the new regulations allow significantly more exemptions across the board, including for the main property market, which should mean there is a lot less disruption this time around.

Residential property

As was the case previously, the new Regulations include a general prohibition on leaving your home ‘without reasonable cause’, but this time there is a list of exceptions and exemptions to the prohibition on leaving your home. Regulation 6(2) includes a list of activities connected with the purchase, sale, letting or rental of a residential property.

The exempted activities permitted include;

• visiting estate agents,
• viewing properties,
• preparing a property for a move,
• moving house
• visiting a property to ‘undertake any activities required for the rental or sale of that property’.

The list is quite comprehensive and offers a broad scope for activities around residential property. These exemptions should allow landlords, agents and property professionals to continue working and earning with the least amount of disruption under the present circumstances.

Commercial property

The regulations refer exclusively to residential property and there is no mention of commercial property, so the general leaving home prohibition will still apply. However, those involved with commercial property transactions may be permitted to leave their home under other wider exceptions.

Regulation 6(4)(a) according to legal information providers Lexology, permits a person to leave the house for work where it is not reasonably possible for them to work or provide their services from home.

Obviously, most physical aspects of commercial property work such as sales and letting agents’ viewings, surveyor’s inspections, repairs, refurbishments and fitting outs, cannot possibly be done from home.

Businesses which have been forced to close for the duration of the lockdown such as hospitality businesses and non-essential shops will however find themselves barred from working or carrying out works in the premises.

Construction

The Government has been keen to stress the importance of construction to the economy and this work can continue as before. The Prime Minister specifically mentioned construction and manufacturing in his statement as workplaces which can remain functioning.

Conclusion

The regulations will be in force for the four weeks of the lockdown ending on the 2^nd of December, after which time the government will have to produce a new set of regulations dependent on the situation at that time.

It does appear that the government intends to encourage the property industry generally to carry on with as little disruption as possible whilst still observing the general precautions placed on the general public namely, maintaining social distancing, mask wearing where appropriate, and personal hygiene measures such as regular hand washing.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Latest lockdown offers fewer restrictions for the property industry | LandlordZONE.

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European Tenants?

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Hi, I have a number of European tenants and was wondering what is likely to happen if we leave Europe without a deal. I keep seeing adverts on TV about getting your business ready for Jan 01 -21.

Are their rights likely to change and possibly have to leave the country within a required timescale and what if they are in an AST that overruns that timescale?

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Meet Mark Smith (Barrister-At-Law) Landlord tax planning strategies – PIN Edinburgh

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Our Hon. Legal Counsel, Mark Smith, Head of Chambers at Cotswold Barristers will be presenting an overview of several landlords tax strategies including special strategies for Scottish landlords at the pin Edinburgh Thursday 19th November.

The events will be held Online and Attendees can expect first-class speakers and great networking opportunities.

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Lodger belongings being collected one trinket at a time?

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Hello, My lodger left the room alone after only 7 days of living in it. She looked like a normal person, but turned out to be very malicious and aggressive.  She left home on October 4th and from that day on hasn’t lived here any more.

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LATEST: Landlords to access mortgage holiday extension scheme too

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Landlords have been reassured by the Government that they can benefit from the new extended mortgage holiday scheme.

The Financial Conduct Authority (FCA) and the Ministry of Housing have updated their websites to clarify that buy-to-let borrowers are covered by its new guidance during the pandemic.

Hard-hit landlords have the option of asking their lender for a payment break of up to six months, with applications open to 31st January.

The extension also applies to those who have already taken a payment pause, who will be able to request a further deferment to bring them to the six-month limit.

The FCA says: “Borrowers, including those with a buy-to-let mortgage, who have been impacted by Coronavirus and have not yet had a mortgage payment holiday will be entitled to a six-month holiday, and those that have already started a mortgage payment holiday will be able to top up to six months without this being recorded on their credit file.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, says it’s good to see such decisive action taken so quickly, as extending payment deferrals for a further six months will provide borrowers with some comfort.

However, he advises landlords: “Only ask for a payment deferral if you need one. Interest will still rack up and you will have more to pay off in the long run so the option should only be utilised by those who really need it.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Landlords to access mortgage holiday extension scheme too | LandlordZONE.

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Has Covid spelled the beginning of the end for purpose-built student accommodation?

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Landlords around Coventry face more misery as two desperate developers have announced plans to advertise new purpose-built student accommodation to the private residential sector.

Council planners have approved the change of use of two student blocks at Eden Square in the city where a total of 123 beds will be available across 14 five-bedroom cluster units, 35 studio units, and three six-bedroom townhouses.

The units will form a ‘co-living’ site for students and private renters, says Kier Property Developments. It blames the pandemic for slow progress on site and uncertainty over student numbers – particularly overseas students – during the 2020/21 academic year.

A separate application to change the use of 89 student rooms at UNINN Infinity on Parkside to residential has also been lodged by the developer UNINN, which would see one studio apartment and 88 cluster flats offered for rent.

Changes will be temporary until 31^st August, when they’ll revert to student-only use.

Apple cart

Patrick Sullivan (left), MD of Red Brick Lettings in Coventry, believes it’s not good news for private landlords.

“This is going to upset the apple cart in a huge way,” he tells LandlordZONE.

“I’d also put it forward that temporary will become permanent, affecting the private landlord market even more. This has happened in other cities before Covid as well.”

The move follows news last month that 500 Coventry and Warwickshire landlords face trying to find new tenants for their student HMOs after the University of Warwick ditched its property management scheme.

The university has been working with Coventry City Council and developers in recent years to build thousands of extra student rooms in purpose-built blocks.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Has Covid spelled the beginning of the end for purpose-built student accommodation? | LandlordZONE.

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Price check your existing portfolio insurance costs and save money

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If you are a landlord that owns more than one property then now is the time to price check your existing insurance costs and see if you can save money. Property 118’s Insurance offering has recently benefited from a new underwriter coming on to its panel and offering superb prices and policies for portfolio landlords.

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Commercial real estate investor optimistic on rent collections

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In a recent Rent Collection & Trading Update, Real Estate Investors Plc, a Midlands-focused Real Estate Investment Trust (REIT) says it is pleased to report that rent collections for previous and current quarters continue to improve.

With a diversified portfolio of 1.59 million sq ft of investment property across all sectors in the Midlands, the company’s updated rent collection data for the March quarter (March to June) has reached 93.44% (adjusted for monthly and deferred agreements) up from 90.7% reported on 21 September, 90.16% reported on 15 July and 81% reported on 15 June.

The June quarter (June to September 2020) its rent collection total has now risen to 90.23% (adjusted for monthly and deferred agreements), up from 86.9% reported on 21 September and 81.94% reported on 15 July.

The September quarter (September to December) rent collection is currently at 89.92% (adjusted for monthly and deferred agreements).

REI’s Rent Collection Data:

The report says that the company is “in supportive dialogue with a number of tenants and anticipate that unpaid rents will be received from these tenants as they become able to commence normalised trading again.”

There are a number of tenants who continue to delay paying rent and are taking full advantage of government restrictions on landlords. These tenants, says REI, have the ability to pay but are refusing to do so whilst these rules are in force, though it seems some of them have now engaged in a dialogue and have agreed settlement arrangements.

“We remain confident of recovering these outstanding rents or being able to reach an agreed solution,” says the report.

Occupancy & WAULT (weighted average unexpired lease term)

Our current occupancy level across the portfolio is 93% and year to date we have secured 23 positive lease events. The WAULT across the portfolio has been materially extended following the recent negotiations with tenants and is currently 4.86 years to break (31 December 2019: 3.82 years to break) and similarly expiry dates have moved to 6.53 years (31 December 2019: 5.79 years to expiry).

Retail

As reported in September, a somewhat normal pattern of trading has been enjoyed by a large proportion of our occupiers for the last few months, with our neighbourhood and convenience retail portfolio in particular showing resilience and strong performance.

Offices

Our office portfolio, which is almost entirely out of town, continues to see improved demand as occupiers seek to provide a safe and convenient environment for their employees without the need for unnecessary use of public transport or City centre commutes.  We anticipate strong ongoing demand and the potential for rental growth and capital appreciation.

Dividend

We have continued to make our quarterly, fully covered dividend payments of 0.50p. The Board will reflect on the strength of the trading performance for the year and make a final dividend payment accordingly, complying with our REIT payment obligations.

ShareBuyback Programme

The Company announced the terms of a share buyback programme on 20 October 2020 with an aggregate market value of up to £2.0 million which is expected to end no later than 31 December 2020.

Paul Bassi, Chief Executive, commented:

“Management’s experience and proactive approach to asset management and the ongoing strategy to operate a diversified portfolio has supported our robust levels of occupancy and rent collection.”

“We also remain confident that occupier demand for our assets will continue and we are mindful that the current environment may create opportunistic sales and acquisitions for the Group.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Commercial real estate investor optimistic on rent collections | LandlordZONE.

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Refund of SDLT on Derelict property

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Hello, I purchased a property last year from my local council which had a covenant stating that the house had to be brought back into a habitable condition within 12 months. I had heard that if the property was not bought in a habitable condition and I had evidence to show its disrepair that SDLT was exempt.

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Fair Rents (Scotland) Bill or Artificial state manipulation of free market rent?

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Recently I received an email from East Ayrshire Council in Scotland regarding a proposed ‘Fair Rents (Scotland) Bill’ which is proposing to allow a ‘rent officer’ to fix rent for private lets and allows him/her to link it to the Consumer Price Index.

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