Buy-to-let lenders pull the plug on products

admin    Uncategorized     agents

The impact of lockdown on income and jobs, along with fears about university students paying rent, has impacted on some lenders’ mortgage offerings

Big-name lenders have ditched HMO and student let mortgage products amid uncertainty around coronavirus, the job market and student accommodation

Paragon has told investors it’s ‘not currently accepting applications on properties that are, or will be, let to students’ – in what it calls a temporary revision. A spokesman says: “We are committed to serving our buy-to-let mortgage customers. However, as a prudent lender, we have made some changes to criteria, including limiting maximum LTVs to 75% and temporarily suspending our activities in some areas, such as student lets, to ensure we focus on our core product offering.”

Meanwhile, The Mortgage Works isn’t offering HMO mortgages. A spokeswoman says: “We withdrew the HMO product range at the end of March due to physical valuation constraints during the lockdown. This proposition remains under review.”

Fewer lenders have HMO products compared with earlier in the year, says Daniel Lee, principal of Legacy Financial Consultants, who tells LandlordZONE that he’s not processing many applications for HMOs or student lets. Says Lee: “From a bank’s point of view, they’re not confident about the ability of some tenants in HMOs to pay their rent in the current climate – they will often be the first to become unemployed. The student rental market has also been the most affected in the private rented sector by Covid and there’s uncertainty about where students will be studying next term, while some haven’t paid their rent.”

Lee says his HMO portfolio landlords aren’t interested in expanding their portfolio at the moment and that if a client now approached him looking for student lets he would ask them to think it through. “When a market leader pulls out, if affects the pricing. The lowest rate I can find on a two-year re-mortgage fixed rate 60% loan-to-value is 3.05% for a corporate client,” he adds. “When big names like TMW and Paragon pull out you need to sit up and take notice.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Buy-to-let lenders pull the plug on products | LandlordZONE.

View Full Article: Buy-to-let lenders pull the plug on products

Major works with ever rising costs

admin    Uncategorized     agents

Can anyone guide me to the right ‘body’ who can give leaseholders advice on ever rising costs of major works to our building. It went for tender with the lowest tender being chosen, it was not going well pre-lockdown and now they are back to work the contractor has ‘found’

The post Major works with ever rising costs appeared first on Property118.

View Full Article: Major works with ever rising costs

Rogue landlords hit with £10,000 fines for HMO breach

admin    Uncategorized     agents

Royal Greenwich clamps down on unlicensed landlords as it pauses efforts to add to schemes in the borough later this year

Four landlords in Royal Greenwich have each been fined £10,000 for letting out an unlicensed HMO.

The unlicensed properties include a two-bedroom HMO in Plumstead rented to four separate tenants, a five-bedroom HMO in Charlton rented to seven separate tenants, a three-bedroom HMO in Woolwich rented to three separate tenants, and a three-bedroom HMO in Charlton rented to three separate tenants; in each of these properties the tenants were sharing a kitchen and bathroom. 

The four landlords were prosecuted following complaints to the London borough, which has had an additional licensing scheme since 2017. It says it is working to actively identify unlicensed properties and will take enforcement action against rogue landlords; in March, it paused its consultation into a new selective licensing scheme – including Woolwich Common, Glyndon, Woolwich Riverside, Shooters Hill and Plumstead wards – until the social distancing measures have been lifted.

Councillor Jackie Smith, cabinet member for community safety and integrated enforcement, says that everyone in the borough deserves good quality accommodation. “Our licensing enforcement is instrumental in ensuring that landlords maintain high standards for their tenants,” she says. “Most of our landlords are following the rules, but for those that aren’t, we encourage you to come forward and license your property before you are caught and risk being fined up to £30,000.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Rogue landlords hit with £10,000 fines for HMO breach | LandlordZONE.

View Full Article: Rogue landlords hit with £10,000 fines for HMO breach

Covid-19 Mini Budget: What this means for property investors

admin    Uncategorized     agents

Rishi Sunak delivers his mini budget (summer economic update)

The Chancellor announces SDLT stamp duty holiday for property purchases and its great news for property investors, UK property investment.

Watch this video below as I provide analysis on what this means for property investors.

The post Covid-19 Mini Budget: What this means for property investors appeared first on Property118.

View Full Article: Covid-19 Mini Budget: What this means for property investors

Appeal Court supports landlord’s rights of entry

admin    Uncategorized     agents

On 1 July 2020, the Court of Appeal handed down its decision in Rees v Earl of Plymouth [2020] regarding a farm tenancy and the landlord’s reserved right of entry.

The case is a significant decision supporting landlords’ rights of access and their freedom of action, particularly in the case of farm tenancies and access to tenanted land, but also for tenancies generally.

In this case the tenant farmed the holding under two tenancy agreements, one granted in 1965 and one in 1968, both now protected tenancies under Agricultural Holdings Act 1986.

The landlord had obtained outline planning permission for housing on the land comprising the farm, where the environmental conditions attached to the planning permission required the landlord to undertake various landscape, wildlife and habitat surveys on the farm.

These surveys included, amongst other things, digging trial pits and boreholes; placing surveyors’ reference pins on the land, and leaving ‘remote bat detectors’ on the land for several days at a time in order to study the bat population.

The case related to the extent of a landlord’s ability to rely upon tenancy reservations to enter onto and carry out works on the tenanted land and came to the Court of Appeal following a High Court case where the Judge had said that a restrictive approach to reserved rights of entry in a tenancy should be taken.

The High Court’s conclusions had been supported by previous cases including Possfund Custodial Trustee Ltd v Kwik-Fit Properties Ltd and Heronslea (Mill Hill) Ltd v Kwik-Fit Properties Ltd, which previously had supported the notion of restricting a landowner’s freedom of movement when relying upon a landlord’s broad-based reservations of rights in tenancy agreements.

This meant an approach which would prevent entirely any intrusive surveys or other works being carried out that might cause interference or damage to the land.

The successful appeal brought against this conclusion by the High Court is now based on a Court of Appeal judgement given by Lord Justice Lewison, and is considered important as he is a leading legal authority on property law issues.

This judgment sets a useful reference point for landlords, particularly agricultural landlords, who seek to rely upon broadly-worded rights of entry in leases. These rights clauses inserted in order to conduct necessary works and such other activities as environmental, landscape or habitat surveys, though such rights should not be construed as permitting substantial or serious interferences with the tenant’s quiet enjoyment.

Tenancy agreements should include specific provisions for a landlord’s right of entry to be exercisable in such cases. The Court of Appeal’s decision makes it difficult be too specific on exactly what is permitted, stating that everything is considered on a case-by-case basis and that one would expect “material” disturbance or damage to be expressly authorised by the terms of the lease.

What is “material” is open to debate, but a sensible interpretation of the landlord’s rights should be taken into account set against the purpose of entry, which should be reasonable and necessary.

Rees v Earl of Plymouth [2020]

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Appeal Court supports landlord’s rights of entry | LandlordZONE.

View Full Article: Appeal Court supports landlord’s rights of entry

Implications of mortgage payment holidays, BBL & CBILS on future loan applications

admin    Uncategorized     agents

Jack Bertolone, Operations Director at Brooklands Commercial Finance, discusses with Kate Faulkner the impact of the pandemic on the UK housing market and the implication of mortgage payment holidays, BBL & CBILS on future loan applications.

Kate Faulkner is a UK property analyst and a regular commentator on BBC

The post Implications of mortgage payment holidays, BBL & CBILS on future loan applications appeared first on Property118.

View Full Article: Implications of mortgage payment holidays, BBL & CBILS on future loan applications

Update on Gas Safety Certificates and Section 21

admin    Uncategorized     agents

Landlords were extremely concerned last year over an appeal court ruling that meant Section 21 notices were invalid when a landlord had failed to serve a Gas Safety Certificate at the commencement of the tenancy.

What’s more, the error could not be mended. The ruling meant that the tenant effectively had a protected tenancy – no chance of eviction unless there was a serious and provable breach of the agreement using Section 8.

The original appeal ruling was the County Court appeal decision of Caridon Property Ltd v Monty Schooltz, which confirmed that the landlord’s failure to provide a copy of the gas safety certificate before the tenant occupied the property was a breach that could not be rectified.

Consequently, a judgment in the much-anticipated case of Trecarrell House Limited v Rouncefield was finally handed down on 18 June 2020.

In this case the landlord again did not provide a Gas Safety Certificate to the tenant before or at the commencement of the tenancy in February 2017. The landlord did provide an up-to-date copy of the Certificate prior to serving the section 21 notice in May 2018, but the tenant refused to leave.

At the possession hearing the landlord was originally granted an order for possession, but the tenant then successfully appealed on the grounds that they were not provided with a gas safety certificate before moving in.

The case then went to the Court of Appeal (Trecarrell House Limited v Rouncefield 2020) which by a majority concluded that the confusion over the regulations between the Housing Act and the gas regulations was wrongly applied by the previous courts.

It means that the anomaly has been removed and that landlords can enforce a possession claim using Section 21 as has always been the case, providing a copy of the Gas Safety Certificate is given before the Section 21 notice is serviced.

This comes a relief to landlords. Although evictions using Section 21 are relatively rare, when it is needed it works well for landlords and gives much more certainty of outcome than Section 8. However, landlords should make sure that all other requirements: as deposit protection, licencing, EPC, Electrical and Gas Checks and the How to Rent Guide information have been supplied and complied with as they can all affect the validity of a Section 21 notice.

The irony is that Section 21 is to be abolished in the coming months – currently delayed by Covid – but supposedly to be replaced by a more effective version of Section 8. We shall see!

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Update on Gas Safety Certificates and Section 21 | LandlordZONE.

View Full Article: Update on Gas Safety Certificates and Section 21

Sub-letting tenant breaching contract but refusing to leave?

admin    Uncategorized     agents

Hi, since my last visit to my 3 bed property six months ago, my tenant on an AST has sub-letted all the rooms individually and he is occupying one of them.

He is now 3 months behind on rent and I am sure he is using covid as an excuse to stay rent free as long as possible and wants me to officially serve him notice and take him to court if I want.

The post Sub-letting tenant breaching contract but refusing to leave? appeared first on Property118.

View Full Article: Sub-letting tenant breaching contract but refusing to leave?

Splitting into leaseholds on freehold building to refinance

admin    Uncategorized     agents

I have a freehold building which was developed into several flats. I am looking hold on to them to rent, but would like to split into leaseholds as the mortgage rates are more competitive (the difference in rates have reduced over the last couple of years but the financing cost have gone up hugely) and it would also allow greater flexibility.

The post Splitting into leaseholds on freehold building to refinance appeared first on Property118.

View Full Article: Splitting into leaseholds on freehold building to refinance

Government urged to give young renters a break

admin    Uncategorized     agents

Landlord group joins forces with charities to push for more support for young people who face losing their income and potentially their jobs this summer

Scores of young renters will struggle to pay their rents as the furlough scheme is wound down, homeless charities warn.

Together with The National Residential Landlords Association (NRLA), Crisis and Centrepoint are calling on the Government to boost the safety net available to young renters before the Government’s subsidy – currently 80% of wages – starts to drop.

The NRLA’s research shows that 24% of private renters aged 16-24 and 27% of those aged 25-34 are reliant on the Coronavirus Job Retention Scheme. It says young renters have taken the largest hit to their incomes of any age group; 56% of 16-24 year olds report that their incomes haven’t been affected as a result of COVID-19, while 76% of those aged 65-74 say they haven’t been badly hit. Despite this, 84% of 16-24 year olds and 87% of those aged 25-34 have been able to pay their rents as usual. It says this proves how reliant they are on Government support to make ends meet.

Following the decision to increase the Local Housing Allowance to cover the bottom 30% of rents, the NRLA wants ministers to now go further by suspending the benefit cap. It also wants advance loans given to Universal Credit claimants to cover the five-week waiting period to receive the first payment of the Credit converted to grants.

NRLA chief executive Ben Beadle says: “Both tenants and landlords need the security of knowing rents can continue to be paid, just as with mortgages and rents for social housing.” 

Together with the Chartered Institute of Housing, The Property Redress Scheme, My Deposits, the Tenancy Deposit Scheme and ARLA Propertymark, the NRLA has launched new guidance offering practical ways for landlords and tenants to address arrears building as a result of the pandemic. 

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Government urged to give young renters a break | LandlordZONE.

View Full Article: Government urged to give young renters a break