Shops needs a ‘normal Christmas’ to get through Covid warns report

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Shops and restaurants are hurting from a high street slump across almost every city and large town in the country – and there are fears the festive season could be the last straw for some.

According to the latest data from the Centre for Cities, the economic recovery stalled in September, when consumer spending in city and town centres fell by an average of 9%.

It’s hit some towns particularly hard; while Bournemouth had the biggest increase in visitors this summer, last month the amount of money spent there fell by 46%.

The south coast town and many other tourist spots including Blackpool, Brighton, York and Edinburgh, saw large drops in the numbers of visitors in September, raising concerns that their initial recovery from Covid-19 may have been short lived. 

Centre for Cities’ High Streets Recovery Tracker recorded overall footfall in the centres of cities and large towns up by just 1% last month – 17% lower than the increase seen in July and August.

Land Commercial MD Adam Diamant says the retail sector has been helped by the Government’s recent changes to the use classes system which means buildings can now become restaurants, retail or offices without applying for planning permission.

“Shops can be used for a much wider variety of uses, changing from a betting shop to a restaurant or doctor’s surgery, and retail has been quite busy for us,” he tells LandlordZONE.

One highlight from the survey is the fact that there’s little indication that the 10pm curfew on pubs and restaurants has had an effect on footfall, which overall hasn’t fallen as a result of the measures. 

However, Diamant worries about the impact of the next few months on the sector.

He says: “If we can’t have a ‘normal’ Christmas in terms of hospitality and retail – with no office parties for example – that will be the real killer to a lot of businesses. I think it will hit people a lot harder than the loss of the summer.”

Visit the Centre for Cities website.

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Chancellor’s job support package is not enough to protect struggling tenants, say landlords

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Landlords have rejected the Chancellor’s extended Job Support scheme which is intended to help businesses affected by current and future local and national lockdowns preserve jobs.

Sunak said today that the government will pay two thirds of employees’ salaries and offer cash grants to businesses told to close during the pandemic this winter, of up to £3,000.

But the proposals have been criticised by the National Residential Landlords Association, which reckons these local ‘furlough payments’ will not be enough to help renters who are already behind in their rent due to Covid.

“The impact of local lockdowns makes it even more important that the Chancellor acts without further delay to bring in a package that will help tenants and landlords to sustain tenancies,” says its Chief Executive Ben Beadle (left).

“Landlords cannot be expected to subsidise tenants who are struggling to meet arrears indefinitely.

“The Government should develop tenant hardship loans such as those in Scotland and Wales to support renters in England who have built arrears since lockdown began in March but are not in receipt of benefits. 

“There also needs to be extra support for those who rely on benefits to meet their housing costs.”

The scheme will start on November 1st and last for six months.

“I have always said that we will do whatever is necessary to protect jobs and livelihoods as the situation evolves,” says Rishi Sunak.

“The expansion of the Job Support Scheme will provide a safety net for businesses across the UK who are required to temporarily close their doors, giving them the right support at the right time.”

Read the HM Treasury announcement in full.
Read more about how Covid is hitting poorer tenants hardest.

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Will life-long renting for the many be the outcome of Covid?

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With interest rates at all-time lows (bordering on negative rates), house prices are being pushed to record levels to the detriment of first-time buyers. They need a mortgage to cover on average 7.8 times their annual earnings, that figure compares to around 3.5 in the early 1990s.

But could all this be good for the rental market?

Research shows that would-be first-time buyers are finding it increasingly difficult to secure a home, and the economic effects of the Covid pandemic are making it even worse. Recent figures show that around 22% of aspiring first time buyers in the UK are still living with parents, and a good proportion of those believe they will have to do so for five years or more to save enough for a house deposit.

If it’s any consolation for those seeking ownership, the situation in the United States is probably worse. High demand, low supply and low mortgage rates have also driven up home prices to historic highs during this summer.

One investor landlord who invests in multiple family housing, Grant Cardone, is quoted in a recent Yahoo Finance article entitled The US will ‘become a renter nation’, as saying:

“Home-ownership is still dead in this country (United States) because the only people that are buying homes right now are people that have equity, great credit and a job… We’re going to become a renter nation in this country… Renting will become the economic choice and the desirable choice again…”

In the United States, currently for every $1,000 price increase, some 150,000 potential buyers are priced out of a home purchase, keeping them in the rental market.

One glimmer of hope for UK hopefuls is the Prime Minister’s statement recently that he wants to repeat the Thatcher home buying revolution, to turn “generation rent into generation buy”. Would new state-backed 95% mortgages help to get struggling homebuyers on to the housing ladder?

Despite the Prime Minister’s enthusiasm for such a scheme, he failed to mention in his speech to the Conservation Party conference how this would actually be achieved. Before the Covid crisis large mortgages with a five per cent deposit were available to those with sufficient savings, but since Covid hit, most of the major lenders, including the likes of Santander and HSBC, have simply pulled out, with virtually all of these deals cancelled until further notice. Even the few 90 per cent loan-to-value deals still available require stringent financial health checks.

Those getting a foot on the first rug of the housing ladder have moved way up in the age brackets, with home ownership even among those aged 35-44 having plunged, according to the Office of National Statistics (ONS) – its a fact that now adults in their mid-30s to mid-40s are three times more likely to rent than 20 years ago

Before the pandemic rising house prices and sluggish wage growth had left many middle-aged people priced out, but now with Covid it’s looking even more likely that people will have to rent for much longer, some with no choice but to become life long renters.

In American as here, renters have higher rates of unemployment, less savings for a down payment and consequently lower credit scores than they did before the pandemic. Renters are now more likely to fall behind on rent payments and more likely than owners to lose their jobs during the pandemic, taking them even further away from ownership.

There is little doubt that renters of today will suffer more hardship that those – mainly the baby boomer germination of over 65s, who were lucky to find it relatively easy to achieve ownership early on.

According to some research by The Royal London insurance company, homeowners without a mortgage can expect to maintain their living standards on a pension pot of about £260,000, while someone who rents privately would need almost double this, or about £445,000.

So for the one-third or people renting now who find this an attractive proposition, especially as the Covid crisis has had the effect of reducing rent levels, the prospects for them in older age are not as attractive. However, there are some advantages for older people renting, such reduced maintenance responsibilities and costs at a time when people could find it harder to maintain their home.

Finally, in America, to emphasise the difficulty for renters, says Cardone: “Homeownership is being driven by the upper class … You need a job that is secure, they’re [the banks] going to look at how you actually went through March, April, May and June with your job. If that was even slightly suspect, you’re not gonna get a home loan… You need a better credit score than you needed before Covid, and you need to secure a job.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Will life-long renting for the many be the outcome of Covid? | LandlordZONE.

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How disgraced footballer cleaned up in the end-of-tenancy game as he tackled pitch ban

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A footballer who was banned by the FA for making bets turned to the property sector for an income while away from the beautiful game.

Last September, former Bromley player George Porter admitted making hundreds of bets while playing for Leyton Orient, Burnley, Welling and Bromley over an eight-year period.

But rather than going off the rails or feeling sorry for himself, Porter set up his own cleaning company doing end-of-tenancy cleaning while he waited to get back on the pitch.

He told Kent Online: “I didn’t have an income but something good came out of that because I’ve set up my own business, so I’m tying that in with football and it’s brilliant.

Cleaning up

It’s a commercial cleaning company, so I work for estate agents and we do end-of-tenancy cleaning, stuff like that. I’m on the books of two estate agents and it’s going well.”

Porter placed a total stake of £5,147 across the 473 bets from December 2011 to May 2019, scooping £2,754 but making a net loss of £2,392. Players, staff and officials at all levels of football are banned from betting by the FA.

He’s now happy to be back playing for Maidstone United, adding: “I’ve come out the other side. I’m over it now and it’s made me even more hungry.”

Porters covers the London/South East London area, specialising in start and end of tenancy cleaning, carpet and upholstery cleaning, after builders cleaning, furniture assembly/removal and office cleaning.

Get advice on end-of-tenancy cleaning checklists.

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NRLA wants English Government to follow Wales and Scotland for PRS help

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The NRLA’s submission to the government is calling for a package of financial support for landlords and tenants to assist with Covid-19 related rent arrears ahead of the publication of its Comprehensive Spending Review.

Unlike the recent announcement by the Welsh government introducing a tenant loan scheme paid directly to landlords or agents there has been no financial support offered in England for rent arrears other than a ban on tenant eviction.

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Tenant wants to use a rent Guarantor Company?

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Have any landlords had experience of accepting guarantees from a rent guarantor company rather than a tenant’s relative or close personal friend?

I have a potential tenant who wants to offer one of these companies (Housing Hand) and use them as the rent guarantor.

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Crazy or inspired? Smartphone app pays landlords up to 12 months’ rent in advance

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A new mobile app that pays landlords rent upfront for up to a year aims to revolutionise renting relationships.

Using Wectory, tenants still pay monthly, but landlords can choose to receive rent for six, 10 or even 12 months in advance.

After they sign up, landlords send an invite to their tenants who make rental payments via the app – on a monthly basis – but they get the funds paid directly to their account for a 12% fee.

CEO Mikhail Balabanov says one-touch payment and automatic recurrent payments means tenants won’t forget to pay rent on time.

Low on funds

Wectory also plans to roll out a feature offering renters short-term help if they’re running low on funds, where it can step in and cover paying the rent for a week or two, charging £50 for the first week and £100 for the second.

Balabanov hopes to emulate the huge success of Klarna – the buy now and pay later style of digital payment for online shopping, he tells LandlordZONE.

“The app will help eliminate so many of the tensions that can come to exist between landlords and tenants.

“By getting a lump sum, landlords might want to make renovations to another property and, as we aim to eventually extend the offer to 24 months’ rent in advance, that could even be the first payment on a mortgage.”

Wectory will have a soft launch in early November, starting with residential landlords, with plans to expand into the commercial sector.

Find out more.

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Reminder: mandatory electrical checks come into force next April…

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The Electrical Safety Standards in the Private Rented Sector (England) Regulations came into force on 1 June 2020 and applied to new tenancies granted on or after that date, from the 1st July 2020. For existing tenancies however, the regulations did not come into force then, but from the 1^st of April next year.

With all the disruption caused during the Covid pandemic and the heavy work-load on landlords and agents involved, given the current high demand for renting, it’s likely there will be a mad rush for electrical testing and electrical remedial work, come the deadline next year. Hence the need for action now.

A Landlord Electrical Condition Report or Certificate will typically cost in the region of £100 to £230 for a flat, £150 to £300 plus for a house depending on the size and location, and that’s with everything in reasonable condition. It will normally take a qualified electrician between 2 and 3 hours to complete.

However, the older the installation the more likely it is that additional work may be required to bring the system up to standard. Only registered electricians can carry out these Electrical Installation Condition Reports (EICR) and these people are likely to be very busy coming up to the deadline.

The Electrical Safety Standards in the Private Rented Sector require that landlords meet the following strict conditions, they must:

• ensure the national standards for electrical safety are met. These are set out in the 18th edition of the ‘Wiring Regulations’, which are published as British Standard 7671.
• ensure the electrical installations in their rented properties are inspected and tested by a qualified and competent person at least every 5 years.
• obtain a report from the person conducting the inspection and test which gives the results and sets a date for the next inspection and test.
• supply a copy of this report to the existing tenant within 28 days of the inspection and test.
• supply a copy of this report to a new tenant before they occupy the premises.
• supply a copy of this report to any prospective tenant within 28 days of receiving a request for the report.
• supply the local authority with a copy of this report within 7 days of receiving a request for a copy.
• retain a copy of the report to give to the inspector and tester who will undertake the next inspection and test.

Where the report shows that remedial or further investigative work is necessary, landlords are obliged to complete this work within 28 days or a shorter period if specified in the electrical engineer’s report.

Landlords must also forward to tenants and the local authority written confirmation of completion of any necessary remedial work by means of a completion report supplied by the electrician.

These electrical checks and the documentation are just another requirement for landlords and letting agents to follow when setting up a tenancy. It is important to ensure the correct documentation is supplied to tenants and that proof of service obtained, otherwise problems will ensure should there be a need to obtain possession of the property.

Here is a simple checklist for some of the documented items which landlords / agents should supply to tenants when setting up a new Assured Shorthold Tenancy:

• Electrical Safety Certificate
• Energy Performance Certificate (EPC)
• Gas Safety Certificate
• Fire safety checks / risk assessment
• Legionella checks / risk assessment
• The current version of the government’s “How to Rent” Guide
• The Right-to-Rent checks with document copies
• Deposit Protection prescribed documentation
• A comprehensive inventory
• The tenancy agreement.

It is good practice to ensure that these documents are all attached to the letting agreement and signed for individually.

Government guidance – electrical safety checks

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Sign my petition or you can say goodbye to the PRS, says guru

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Sign my petition or risk witnessing the demise of the private rented sector, says leading property investment mentor and landlord Ranjan Bhattacharya, who’s defended his petition to allow landlords to evict tenants who are 14 days in arrears.

Bhattacharya believes critics have got the wrong end of the stick and explains: “I’m not advocating that after 14 days a tenant is automatically turfed out of their home, but that after 14 days of arrears the landlord has the right to instigate court proceedings.”

In his latest YouTube video, he says most people only take the situation seriously in the days before a deadline.

“It’s instigation of proceedings that often makes people take their head out of the sand and address the problem. It’s surprising how many disputes get resolved after you’ve made your intent and seriousness known.”

Under the current system, landlords are screening out tenants who aren’t ‘A1’ because they can’t afford to take a punt on a tenant who could fall into rent arrears, says Bhattacharya.

He reckons that lenders will also leave the market or insist on lower loan to value mortgages, putting more burden on landlords, if they continue to be faced with non-paying tenants and have no way of getting them out.

While many landlords have backed his call – the petition now has more than 6,000 signatures (it needs 100,000 signatures to be formally debated by Parliament) – others on social media insist he is simply fuelling anti-landlord rhetoric.

But he insists: “You will never be able to do anything to appease people who are ideologically opposed to your very existence.”

Adds Bhattacharya: “We’ve been pushed around by Government for too long – we need to show as landlords we have a voice.”

Sign the petition: https://petition.parliament.uk/petitions/549258
Watch the video in full.
Read a guide to evictions best practice.

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12-month housing market expectations move deeper into negative territory

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The latest RICS Residential Survey shows the UK housing market activity remained strong in September with buyer enquiries, agreed sales and new listings all remaining strong over the month. Nevertheless, sales further ahead are expected to weaken amid the challenging macro-economic environment

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