LATEST: Activists call landlords ‘parasites’ and picket TV presenter’s buy-to-let workshop

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Living Rent claims rent rises are ‘out of control’ in some parts of Scotland and that Martin Roberts’ event in Edinburgh is encouraging market speculation.

Scotland’s
tenants’ union has branded landlords “parasites” and is picketing an Edinburgh
event tomorrow aimed at helping them maximise profits.

At least 50 Living Rent supporters
are poised to join a demonstration outside the free workshop, described as a
free two-hour preview for Homes Under The
Hammer presenter Martin Roberts’ property investment course.

Although Roberts himself
won’t be at the event at the city’s Hilton hotel, aspiring landlords will be
given tips about
how to acquire finance, beat the
competition, and calculate their maximum price – complete with training videos
and e-books.

Rent controls

Living Rent is repeating
calls for the Scottish Government to introduce more effective rent control
measures, with a call to action on its Facebook
page: “Join us to say homes should be for people, not for profit – and demand
the government introduce proper, strong rent controls to stop property
parasites from driving tenants into poverty.”

So far, 52
people have promised to take part in the protest with more than 300 people
interested in the event.

The group says the costs of renting in Scotland’s capital
continue to rise at eye-watering levels, and that between 2010 and 2019, the
Lothians saw the average price rent for a two-bedroom property rise from £665 a
month to £972, a 46.3% increase.

Eleanor White, from Living Rent, says: “Scotland’s
housing market is deeply broken. People simply won’t forgive the government if
it continues to stand by and watch as people are driven further into poverty by
this kind of parasitic approach to housing.”Pauline
McNeill MSP’s Proposed Fair Rents (Scotland) Bill or ‘Mary Barbour Bill’ is currently hoping to win
approval in the Scottish Parliament; it aims to radically reform the sector by
linking rents to average wages and providing more information about rent
levels.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Activists call landlords ‘parasites’ and picket TV presenter’s buy-to-let workshop | LandlordZONE.

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How are you feeling about being a landlord? Well, that depends on your location and portfolio size!

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Research by buy-to-let mortgage firm Paragon rising optimism among landlords but with surprisingly wide regional and business sector differences.

Landlords in the South West and East Midlands are most likely to be feeling good about their business and predicted yields over the next three months, while those in central London and the North West most downbeat about their balance sheet.

In its quarterly market overview, buy-to-let mortgage provider Paragon reports that it’s not all doom and gloom in the sector, with those renting out 11 or more properties the most positive about their prospects.

Interviewing
nearly 800 landlords, it found 42% in the South West rated business
expectations as good or very good in the next three months compared with 23% in
the North West.

Boris
bounce

The
Boris Bounce seems to be filtering down into the private rented sector generally,
as Paragon found a big jump in landlord confidence in the UK financial market,
with 24% rating its prospects as good or very good compared to just 9% in Q3.

And
although they’re less optimistic about the prospects for yields, landlords
still believe both rents and property prices will increase as a direct result
of the election; a quarter of respondents said rents would rise, compared to 1%
who predicted a fall.

Richard Rowntree, Paragon managing director of mortgages,
welcomed the green shoots of recovery in confidence after several quarters of declining
optimism.

“Although
still low compared to historic levels, a more certain political and economic
landscape will hopefully provide the platform for confidence to continue to
grow,” he says.

“Although
tenant demand has remained strong, landlords have had to weather a myriad of
regulatory and tax changes over the past five years, so they will be looking
for Government to allow those changes to fully bed in and for a period of
consistency.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – How are you feeling about being a landlord? Well, that depends on your location and portfolio size! | LandlordZONE.

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ARLA report – Huge blow for tenants

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ARLA’s latest PRS report, click here, shows tenant demand reaching a record high in January, with an average of 88 prospective tenants registered per member branch. Annual demand for rental accommodation has increased by 21%, rising from 73 in January 2019.

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£2.9bn increased Councils funding includes rewards for building new homes

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Following a vote in the House of Commons, the government confirmed councils in England will have access to a share of £49.2 billion in 2020 to 2021, an increase of £2.9 billion or 4.4% in real-terms.

The settlement will give councils access to a £1.5 billion boost for social care funding and ensures

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Call of the Week: Supporting a long-term tenant who struggled to pay rent last month

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This week we had a call from one of our members who needed advice in managing an issue they were having with one of their tenants. They had a long term tenant in one of their rental properties who had been there for a number of years, and maintained a good relationship with the landlord. […]

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Why become a landlord if you can’t regain possession?

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Section 21:

That’s the
question posed by Charles Moore writing in yesterday’s Daily
Telegraph.

Why do people let
houses?, Moore says. The obvious answer to that is, because they
expect to make money from their investment and they want their money
in a safe place – “safe as houses” as has always been the
mantra of the sage property investor.

Profit is not large in buy-to-let but it still usually blows away what can be got investing in an easy access savings account at a little more than 1%. What’s more the safe store of value and gradual capital growth gives a nice hedge against inflation.

The low interest
environment has pushed up prices but they have also produced some of
the lowest mortgage rates in living memory, what’s more the Bank of
England has forecast that interest rates could stay low for the next
20 years!

Even so, landlords profits are being squeezed by a hostile tax environment due to tax changes introduced by George Osborne and unchanged by his successors, though we’ve yet to see what the current incumbent will do. My guess is not much.

If landlords can’t make good enough returns for the risk and hassle they perceive, then they will not want to let property any more, and what’s more, as the senior end of the landlord cohort start to cash-in, and sell-down, new younger landlords will no longer come along to replace them.

Yet, in the face of all this the Government is toying with the idea of getting rid of Section 21 says Moore. “This section allows a landlord to ask a sitting tenant to quit at the end of an agreed period. If it is abolished, so that no notice to quit can ever be issued to a tenant, the incentive to let disappears. The value of the property thus encumbered drops, sometimes halves. Besides, sitting tenancies require rent controls to work, so the landlord will be stuck, not only with the tenant, but with every prospect of lower returns as time passes,” he says

The combined effect of the current tax regime and the changes in the letting laws could be devastating for thousands of small-scale UK landlords, ironically most of them natural Tory voters.

For a start, unless the government comes up with an acceptable alternative to section 21, and it’s hard to see what that would be, property values will be affected. Mortgages may no longer meet the lenders’ loan-to-value criteria, so technically the loans could be called in.

A knock on effect
would be on all the ancillary services that help landlords with their
buy-to-let investments: agents, builders, plumbers and electrical and
gas engineers, the very people the government says it wants to
encourage, as Moore says, “…just the sort of aspirant, practical
people the country needs.”

Low earners are struggling because of the housing shortage and high rents, but creating an army of sitting tenants on protected rents will not only impede mobility – movements between jobs – it will result in a run-down housing stock because landlords will no longer run an unprofitable business and maintain housing standards.

We’ve seen this effect already with those Protected Tenancies still left over from the Rent Act era, where landlords either can’t or won’t spend money maintaining and modernising their properties when their tenants have been in occupation for a long as 50 years on a controlled peppercorn rent.

There are an estimated 1.5 million landlords in England alone. Property has long been a go-to option for people looking for bank-beating returns on their excess cash. But in a recent survey of 19,000 landlords 17% said they’re likely to sell up. More worryingly though, 56% weren’t confident property will provide adequate returns over the next ten years.

Life has become very
tough for the amateur landlord but the government, while professing
for years how much it values the small-scale landlord, seems not to
care. In fact it’s squeeze on landlords could be said to be
compatible with Conservative political philosophy – to create or
maintain a home-owning democracy, as opposed to a nation of renters,
then you have to stop landlords from competing with first-time
buyers.

Landlords are a relatively small voting group and garner little sympathy from the media and the general population. So to quote Jean-Baptiste Colbert, Louis XIV’s finance minister, if “the art of taxation consists in so plucking the goose as to procure the largest quantity of feathers with the least amount of hissing”, then landlords represent an attractive target group.

Osborne’s strategy
was to “level the playing field”, or as it transpires, tilt it
towards first-time buyers. The changes have helped HMRC to rake in a
bumper harvest of tax revenue, not just from landlords’ income tax,
but on the considerable capital gains made by those who have now
decided to cash in when the properties have been held for some years.

In the 2018/19 tax year, capital gains tax (CGT) receipts, largely from landlord sales, rose by nearly one-fifth over the previous year, from £7.8bn to £9.2bn. By scrapping landlords’ ability to claim tax relief on their mortgage interest the government has simply nudged those landlords who where teetering on the brink of profitability to throw in the towel. In the meantime, other landlords, sensing the change in the political landscape, have also decided to get out before there’s a rush for the door.

The whole thing would seem to be designed to apply downward pressure on house prices; landlords can no longer afford to pay as much for properties given mortgage controls and the reduced profit they generate, while first-time buyers have fewer resources.

So a huge slice of demand is taken out of the housing market, while at the same time supply is increased at the margins as a group of forced-out landlord sellers are keen to be rid of unprofitable investment properties.

It’s hard to see
there being another house-price crash without a major downturn and
rising interest rates or surging unemployment (they usually go
together), but it’s equally hard to see any evidence of a return to
an investment bonanza for residential property.

Few people expected
to see the tax or political tide shift so drastically against them.
Portfolio landlords, usually operating as an incorporated business,
are weathering the storm much better, but for individual landlords
there is no doubt about it, the government has made life difficult.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Why become a landlord if you can’t regain possession? | LandlordZONE.

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Welsh Government want 12 months eviction protection

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The Welsh Government wishes to provide greater security for people who rent their homes. This security will be achieved by extending the minimum notice period for issuing a section 173 notice from two months to six months. Currently, the section 173 notice under the 2016 Housing Act operates in the same way as a section 21 notice

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BREAKING: Huge surge in demand for rented property recorded in January, say letting agents

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Last month was the busiest on record for letting agent branches as the number of tenants registering for properties increased by 56%.

Letting agents say they experienced a record
56% increase in demand for rented property during January, latest figures show.

Members of industry association ARLA Propertymark said they saw 88 prospective tenants registered for each branch up from 56 the month before, but that diminishing supply of stock meant 42% said their landlords had asked for rents to be increased as the market tightens.

This would not appear to be a monthly blip, either. ARLA says demand for rental accommodation is also rising year-on-year, up 21% when compared to January 2019.

But the pressures on landlords of recent tax hikes and increased regulation as well as the temptations of switching to Airbnb are impacting supply.

The number of properties managed per lettings agency branch dropped to a six-month low of 191 homes and that overall the number of homes available to rent in the market is down year-on-year.

Tenants are literally paying for the government’s clamp-down on private landlords; Two years ago 18% of tenants surveyed by ARLA had experienced a rent increase during January, a figure which has jumped to 42% this year. “Our recent research found that tenants could miss out on nearly half a million properties as more landlords exit the traditional private rented sector and turn towards short-term lets which will only serve to worsen the problem for those seeking longer term rental accommodation,” says David Cox, ARLA Propertymark Chief Executive.

“With the Spring Budget around the corner, it’s important that the Government works to make the private rented sector attractive to landlords again, rather than introducing complex legislation which ultimately squeezes the sector and leaves tenants worse off.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – BREAKING: Huge surge in demand for rented property recorded in January, say letting agents | LandlordZONE.

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Edinburgh begins its much-publicised crackdown on Airbnb

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Four flats within one block are served with orders stopping them being rented out via short-lets platforms, as council’s planning chief tells LandlordZONE that licensing is not far away.

Edinburgh’s crackdown
on Airbnb rentals has started in earnest as four flats in one city tenement
block have been served enforcement notices.

It follows a report out this week
that reveals Edinburgh Old Town has the highest incidence of Airbnbs in the UK,
with 29 active listings for every 100 properties, according to data gathering
firm Inside Airbnb.

Last month, Housing
Minister Kevin Stewart announced measures to let local authorities start licensing
schemes for short-term lets from spring 2021. These aim to regulate the sector which is being blamed for
helping to create a housing crisis in the region’s cities.

Councillor
Neil Gardiner, Planning Convener, told LandlordZONE: “It’s really
encouraging to see the existing powers we have through enforcement are working.

“This
is resource intensive though and we’re continuing to work with the Scottish
Government to introduce a licensing regime which will give us far greater control
over the sector in the future.”

Stop orders

The four city-centre flats, at 68B Grassmarket, all
received their orders to stop operating as short-term lets on 28 January, but
the notices have only been public now. The council says it took the measure to
protect quality of life for other residents in the building.

The number of Airbnb guests, two per flat, and high level
of turnover, also led to the enforcement notice with planners stating the use “is
causing disturbance to the established residential character of the building”.

Renting out a home for short periods of time doesn’t normally
need planning permission however, permanent use of a property for short lets –
especially on a scale that could affect neighbours – is likely to be considered
a change of use, requiring consent.

Just Planning, a
householder planning appeals specialist, reports that other councils around the country are starting to flex
their muscles and using their planning powers to serve enforcement orders.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Edinburgh begins its much-publicised crackdown on Airbnb | LandlordZONE.

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Nigerian landlord ordered to return rent and pay fines totalling £202,000

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Lagos-based repeat offender landlord Olu Soyebo rented out three properties within a converted house for nine years despite not being give permission for the conversion.

A Nigerian landlord has been ordered to pay back the £190,000
he made in rent from illegal flats – one of the biggest financial penalties
handed out this year within the private rented sector.

Brent Council finally caught up with Olu Soyebo,
61, from Lagos, who spent almost a decade renting out three flats at a property
in Windsor Crescent, Wembley, despite having been refused planning permission
in 2009 to convert it.

Harrow Crown Court heard how Brent’s
enforcement team served a notice on him, but follow-ups found the flats had
been reinstated by Soyebo and rented out separately, this time for more than
nine years.

He was landed with the hefty confiscation
order and now has three months to pay the money back or face a jail sentence.

Judge Tregilgas-Davey criticised Soyebo for
failing to put measures in place to ensure that the council’s warning letters,
which were sent to several known addresses in London, would reach him at his
home in Nigeria.

The court also heard it wasn’t Soyebo’s first
enforcement notice; in 2001 a notice was served on him when the property was
being used as an HMO without planning permission.

Illegal rent
revealed

Judge Tregilgas-Davey told Soyebo that the
breach had continued for a “not insignificant period of time” and that
financial investigators from Brent Council were able to prove how much money
he’d made in illegal rent.

He said: “You entirely ignored the
foreseeable risk when you converted [the property] into two flats without
planning permission.”

As well as the confiscation order, he was
fined £12,000 and ordered to pay the council’s legal costs.

Councillor Shama
Tatler, cabinet member for regeneration, property and planning, says: “This puts
rogue landlords on notice that Brent Council will take very strong action if
they try to dodge the planning laws.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Nigerian landlord ordered to return rent and pay fines totalling £202,000 | LandlordZONE.

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