Minister promises help for landlords caught up in cladding scandal

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Housing minister Robert Jenrick has promised to help landlords and other owners of the estimated 500,000 leasehold flats caught up in the cladding remediation scandal.

In an interview with a national newspaper over the weekend, Jenrick said he would lobby the Treasury to ‘do more’ for leaseholders facing ‘life changing’ financial problems.

He said he understood that many leaseholders face both enormous costs while owning properties that, until the cladding problem in their buildings is sorted out, are worthless and un-mortgageable.

His comments follow mounting criticism of the government’s handling of the problems faced by home owners as the fall-out from the Grenfell tragedy has unfolded.

Hundreds of privately funded towers blocks around the UK now need their cladding to be replaced but the Treasury has so far declined to foot the entire bill.

Funding

Following the Grenfell fire, it released £400 million to pay for the removal of aluminium composite material panels from social housing-controlled blocks, and later gave £200 million towards helping some private blocks. It then this year pledged £1 billion towards helping fund the removal of other types of potentially danger cladding.

Jenrick did not clarify what ‘do more’ means but it likely to be an attempt to find the estimated additional £2 billion needed to pay for non-ACM cladding to be replaced on towers.

The urgency of the situation was highlighted two weeks ago by a Public Account Committee report into the Ministry of Housing, Communities and Local Government’s handling of the crisis.

“The government must step up and show that it will put a stop to the bickering over who is responsible, who’s going to pay for the remediation – and just put this right,” said its chair Meg Hillier.

Read more about the cladding scandal.

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Council must re-house when tenant is given notice not wait for bailiffs – Local Government and Social Care Ombudsman

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In a groundbreaking decision, The Local Government and Social Care Ombudsman has declared that a council should not have waited until the eviction date to rehouse a mother but should have rehoused her when she first informed it that she was being made homeless.

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HMO prejudicing the sale of my property?

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I bought my Aberdeen flat March 2014 while working overseas and did not step foot into it until April 2018. During this period the property was being utilised by a friend and her family for the first 2 years followed by 2 years of rental.

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Leading landlord launches evictions petition. Will you sign it?

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Leading property investment mentor and landlord Ranjan Bhattacharya has launched a petition calling for tenants to face eviction if they fall more than two weeks behind in rent payments.

This, Bhattacharya argues, would put the UK on the same footing as Australia.

“You can’t go into a supermarket and steal your weeks groceries,” he says.

“There are laws in place to protect shop keepers large and small. Not paying rent is also theft with the Landlord being the victim.”

He is asking fellow landlords to sign his petition and help him get it to 10,000 signatures at which point the parliamentary e-petition rules require the government to provide a response.

At 100,000 signatures the petition would have to be formally debated within the Houses of Parliament.

Bhattacharya argues that the existing evictions system – even when the current restrictions on evictions are discounted – are unfair to landlords, claiming it can take up to a year in normal times to evict a tenant.

“In that time the landlord still has to pay mortgage and other costs,” he says.

“This can ruin many small scale Landlords. Furthermore, it incentives landlords to only rent their properties to tenants with higher than average income who are likely to care about getting a bad credit rating.”

Bhattacharya’s follows a similar and successful petition completed last month which garnered over 126,000 signatures. It called for landlords to freeze rents for the duration of Covid and was debated in parliament on 17^th September.

Bhattacharya hosts the Baker Street Property Meet and has a popular YouTube advice channel.

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Average UK rent up to £987

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The September 2020 HomeLet Rental Index has been released indicating on their figures that the average monthly rental cost in the UK is now £987. This is an increase of 0.2% compared to August and 2.1% annually.

Excluding London

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Satisfaction not Guaranteed

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Given current economic circumstances, many more landlords than previously will accept tenants who are or may in future be in receipt of benefits. With the ending of furlough and possible widespread redundancies, many tenants may find themselves in financial difficulties.

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‘Check rental properties regularly’ police urge landlords as cannabis farm epidemic spreads

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Landlords are being urged to carry out regular checks on their properties if they suspect tenants are hosting cannabis farms following a nationwide boom in the illegal industry over lockdown.

Police forces say the last few months have seen a proliferation of cannabis farms being created, with increased numbers of raids as a result.

West Leicester police report closing down at least one cannabis set-up every week, while Nottinghamshire Police have seen a rise of 280% in cannabis plant seizures during lockdown compared to the same period last year. 

Nationally, police say more than 90% of cannabis farms are set up in residential properties, with rental homes particularly attractive as there’s no paper-trail – the properties can’t be connected to the gangs running the operations.

Foul play

Leicester police are appealing directly to landlords and agents who suspect foul play to look in on their homes, at least from the outside, every three months – about the time it takes for a cannabis plant to provide a yield – which they believe would deliver a significant blow to the illegal trade and deter others from setting up in the area.

Law firm Hägen Wolf suggests that landlords, and any helpful neighbours, should keep a detailed log of conduct such as night-time visitors, strange noises, or any funny smells, which might indicate that illegal activity is taking place, and ideally supported by photographs and videos.

Solicitor Philip Copley adds: “If it is safe and possible to report the matter to the council or police, then do so – that can create a paper trail which strengthens the landlord’s case.”

The tell-tales signs of a cannabis factory include excessive fortification, silver duct tape hanging out of windows, blacked-out windows or windows with condensation, peeling wallpaper or mildewed walls, a pungent smell or sudden fluctuations in electricity bills.

Read more cannabis farms stories.

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Commercial landlords fear the worst as the final quarter’s rent becomes due

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Landlords are bracing themselves as they survey the damage already inflicted on quarterly rent collection rates as they anticipate those for the final period in 2020.

With employees once again being told to work from home, a 10pm curfew on food and beverage businesses, many leisure outlets in total lockdown and with the threat of even harsher lockdown restrictions to come, there is every chance of the proportion of tenants in the retail and leisure sectors withholding rent rising still further.

So far only 22 per cent of nation’s shops, offices and warehouses’ rent has been collected for the final quarter. According to Re-leased, a commercial property management platform, basing its figures on 35,000 leases, retailers have to-date paid only 13% of the rent owed for Q4, 2020; it’s the lowest collection rate seen since the pandemic began.

Office tenants were better at a payment rate of 32% which is slightly up on the payment rate for previous quarters, as was the rate paid by industrial tenants at 18.3%, but still these are scary figures.

By the end of August, retail landlords had collected around 59 per cent of second quar­ter rent and 60 per cent of that due for the third quarter, according Re-Leased, but this was less than that achieved for the office and industrial sectors.

The government’s extension on the ban on forfeiting leases due to non-payment of rent, to the end of 2020, has given tenants the confidence to withhold rents even when funds are available, while landlords’ room for manoeuvrer has been severely restricted.

Many landlords have reach agree­ments with their tenants, including setting-up rent re-pay­ment plans, waivers and lease restruc­turings. The parties recognise the immense stress being placed on retail high-street and other outlets.

In the short term at least, the balance of power has been shifted in the favour of occupiers, with some tenants resorting to threats and forceful tactics to secure more favour­able lease terms. It is perhaps understandable that smaller, independent retail and leisure outlets would wish to withhold rent, but many large operators are also joining in.

Big-name brands, notably JD Sports (JD.), have been attracting the ire of landlords over their decision to partially withhold rent despite sitting on quite large cash piles. The sports fashion retailer has argued with its landlords that it would be unfair to pay full contractual rents when there “is no realistic prospect of any income from a store”.

Another example is Boots withholding rent as it seeks to put the “relationship with our landlords on a more modem and equitable footing”. This follows a rapid decline in Boots’ footfall since the start of the pandemic. Store owners Town Centre Securities has said it has not received a penny since Boxing Day last year.

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Veteran Landlords Decimated by University Crisis

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In a shock move, the University of Warwick has pulled the rug out from under more than 500 Coventry and Warwickshire landlords.

After guaranteeing some 3,000 plus students for over 500 properties they are now saying to ALL those landlords “So long

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MARKET WATCH: Rents for new tenancies increase as demand booms across the UK despite Covid

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Rents on new tenancies went up for the third successive month in September across the UK, boosted by strong tenant demand.

Rental values in seven of the 12 regions monitored by HomeLet have risen by an average of 0.2% since August, with the average rent now £987 a month – up by 4% since June – according to its latest Rental Index.

The North East saw the biggest jump (2.2%) followed by Wales and the East of England (both 1.4%). Northern Ireland and the North West experienced the largest dips with -1.6% and -1.4% respectively.

Over the last year, HomeLet reports that the South West has seen the biggest increase in agreed rents at 6.6%, while rents in London have slumped -2.8% and there’s been a -2.4% drop in Northern Ireland year-on-year.

Chief executive Martin Totty (left) says landlords will be encouraged to see rents continuing to hold up, which he attributes to strong tenant demand with a slightly constrained supply and stronger sales market – possibly a short-term phenomenon.

Adds Totty: “Those landlords committed to the sector for the long term and having shown their willingness to confront the multiple headwinds of taxation change, new regulatory requirements and, in certain circumstances, longer notice periods to gain possession of their properties, may still be rewarded for their flexibility and their perseverance with reasonable returns on their investment risk.”

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