Feb

SHORT-LETS: Beware ‘guaranteed rent’ schemes, warn undercover blogger and evictions specialist

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Increasing numbers of landlords are being left out of pocket and facing the wrath of local authorities, building managers and lenders when short-let based guaranteed rent schemes go wrong.

An anonymous blogger has spilled the beans on
the growing but shadowy world of companies who persuade landlords to let them
sub-let properties to corporates and holiday makers in return for ‘guaranteed
rent’ schemes.

The blog, written by an un-named London
letting agent, warns landlords on two fronts.

Firstly, managing agents who look after large
blocks of leasehold apartments are wising up to the practice, which is often in
breach of the head lease, as are mortgage companies who often exclude
short-lets within their terms and conditions.

The anonymous blogger, who is believed to be the
boss of a London letting agency, says he recommends to his landlords that they
turn down these ‘corporate let’ offers because, all too often, the intermediate
companies disappear, leaving the landlord out of pocket.

“We recently took on and rented an apartment that had been let
to a short let company on a ‘guaranteed rent’,” they say.

“Unfortunately
the short let company was struggling and by the time we re-let the apartment, the
Landlord was owed several months of rent.”
Paul Shamplina of Landlord Action says this kind of activity has increased
ten-fold in recent years because, with rent rising dramatically, companies
operating in the ‘sub-letting with consent’ market – as it is also known – are
aware that there are huge profits to be made.
“There are some professional companies that do it
correctly, but mostly it’s the wild west,” says Shamplina.

“At Landlord Action we see it at
the other end, when the landlord is not being passed on the rent, or their
property is overcrowded and breaching so many regulations…but they are on the
hook for any action the authorities decide to bring.

“It’s a multi-million pound business, that
will keep growing and will not be controlled, unless there is stiffer
regulation and much more resource needed for stiffer enforcement”.Read
the blog in full.

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