Rental cost and increases at record levels

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In August, the number of tenants experiencing rent hikes increased to 40%, from 31% in July. This is the highest figure recorded since records began in January 2015 and the highest level every in August.

Year on year

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Leading builders still building fewer homes

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Home Building:

Leading developers Barratt, Persimmon and Taylor Wimpey, it is being argued, are still building fewer homes than they were 10 years ago, before the financial crisis hit. This is despite being handed out millions from the taxpayer through the government’s Help-to-Buy scheme.

The house builders themselves are claiming that the Help-to-Buy scheme is crucial in the country’s efforts to tackle the chronic housing shortage. But detractors are arguing that all that the scheme is achieving is higher house prices at the lower end of the market, resulting in inflated builders’ profits and their director’s pay, while doing little or nothing to help struggling first-time buyers.

According to the Daily Mail, Persimmon, whose boss Jeff Fairburn has been dubbed “Mr £131 million� over the size of his bonus, built 16,043 homes last year and another 8,072 in the first six months of 2018.

Accordingly, analysts at AJ Bell have come up with figures to show that Persimmon is on course to build 16,685 homes this year, compared to 16,701 in 2006. If it meets its target this year its profits would be nearly £1.0 billion.

Despite its failure to build more homes, and in spite of the government incentives, Mr Fairbum was handed £47.1 million last year, being the first tranche of his bonus. An analysis of the company’s accounts shows that profits went from £225 million in 2012, one year before the Help-to-Buy scheme was introduced, to £977 million last year.

It’s a very similar story with the other builders.

Sam Dumitriu, head of research at the Adam Smith Institute think tank, has said:

“Help to Buy creates more demand for housing, which pushes prices up, without increasing supply.

“Simply adding more fuel to the fire, and more demand to the system, only makes Britain’s housing problem worse.’ Help to Buy allows house hunters to purchase new-builds worth up to £600,000 using deposits of 5 per cent.�

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Leading builders still building fewer homes | LandlordZONE.

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Changes to Section 21 notices from October

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On 1st October 2018, changes to the Section 21 Notice come into force for letting agents and landlords. This will require all Assured Shorthold Tenancies (ASTs), regardless of their start date, to comply with guidelines as to when and how a landlord can serve a Section 21 Notice

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Brooklands CF Bridging and Development Finance Seminar

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Thank you very much to Malcolm and his team at Brooklands Commercial Finance along with Shawbrook Bank for running the seminar and using the Shawbrook offices in the heart of the City.

We started with a Mortgage and Lender Market Update in particular discussing rental stress testing and the amount you can borrow by using the advantages of criteria on 5 year fixed rates and in the name of a limited company.

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Bod’s decision on whether or not to incorporate his rental property business

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Bod has a dilemma.

He is a portfolio landlord who is badly affected by the Section 24 restrictions on finance cost relief.

We have been friends on Facebook for a long while and Bod messages me regularly.

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Hackney landlords told to get HMO licensed

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HMO Licensing:

Landlords in Hackney could face unlimited fines and prosecution unless they apply for a licence by 3 December, as part of new property licensing measures coming into force in Hackney

The new powers mean that landlords of all private rented homes in Brownswood, Cazenove and Stoke Newington wards will need to hold a licence committing them to keeping properties safe and treating tenants fairly.

And landlords of the 4,000 Houses in Multiple Occupation (HMOs) – with two or more households and shared facilities such as kitchens, bathrooms and toilets – across the borough will also need a licence requiring them to meet acceptable standards.

Those who don’t get licensed or fail to comply with the conditions will face fixed penalties of up to £30,000, a criminal prosecution with unlimited fine, or be forced to pay tenants back up to a year’s rent. Serious offenders can be banned from letting homes completely, and placed on a rogue landlords’ database.

The Council’s private housing enforcement team is set to almost double in size to uncover perpetrators and tackle issues such as inadequate heating, damp and mould, dangerous boilers, exposed wiring and vermin infestations.

Council research found that around one in five homes covered under the new measures suffer from serious hazards, disrepair or poor management.

Kim Wright, Group Director for Neighbourhoods and Housing, said:

“Many of Hackney’s landlords provide a good, professional service, and we’re looking forward to working with them to create better conditions for renters in Hackney.

“But these new measures – along with our expanded enforcement team – will tackle those who don’t treat renters fairly or keep their homes safe.

“We’re encouraging all landlords to check if they need a licence and get their applications in to us before we begin enforcement in December.�

Full details on the new property licensing measures, including which landlords need a licence and the licensing conditions, are available at:

www.hackney.gov.uk/property-licensing

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Hackney landlords told to get HMO licensed | LandlordZONE.

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Urgent help needed on 1991 Building Reg compliance

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I desperately need help with what to do with my shop that has self contained flats above re s157.

I have drawn a blank with anyone who can help me ascertain 1991 Building Reg compliance so I’m exempt from licensing.

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Labour’s plans “Tenant Power”

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Housing Law:

The next Labour government will be “the most radical government on housing since that great Labour government after the war�, referring to the government of then Housing Secretary, Aneurin Bevan.

Speaking at the Labour Party Conference in Liverpool on Monday, John Healey, Shadow Heath Secretary, pledged Labour to introduce controlled rents and an end to Section 21 (no-fault) evictions.

He also said that a new Labour government would fund a national network of Renters’ Unions, to organise and defend their rights, as well as introducing a national levy on second homes.

Labour wants to offer private tenants greater powers, he said, and it is likely that the proposed radical measures will greatly concern a lot of landlords.

Uppermost in their concerns will be the abolition of Section 21 notices, a process which has been in place for 30 years, allowing landlords with Assured Shorthold Tenancies (ASTs) to be assured of the return of their properties, should they need it.

Labour would abolish the legislation allowing private landlords to evict tenants without giving a good reason, which would mean landlords would need to go through a complicated legal process. This is a court process where landlords must convince a judge of the need to evict.

The current process to do this, known as the Section 8 process, is often a long and drawn-out legal process which is often very expensive for landlords, but Labour so far have not hinted at an alternative.

Residential Landlords Association has long been calling for Australian style Rent Tribunals as an alternative to the oversubscribed courts system, should there need to be a re-think on Section 21.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Labour’s plans “Tenant Power” | LandlordZONE.

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New Landlord Association seeking pledges

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For the past 18 months, I have mulled over the idea of setting up a new National Landlords association. I won’t bore readers to death explaining why. We all know how frustrated and sickened the community is with the other main associations failing to aggressively fight our corner and instead assist the councils implementing their rotten Selective licensing schemes.

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Finance moving forward

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Hi, A general question which I am sure has a simple answer but I would like to seek a range of views.

I currently have a few BTL’s on an interest only basis with mortgages currently running up to retirement age.

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