Renters Reform Bill debate pushed back but still on track for June

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The Renters Reform Bill is on track to get Royal Assent next June, says the NRLA – despite the possibility of a snap May general election.

The government has confirmed that the first debate on the legislation will not take place until at least after party conference season, meaning that due to lack of time, a carry-over motion is likely to be used to introduce the Bill in the next Parliamentary session following the King’s speech on 7^th November.

The NRLA called for a timetable for the Bill’s progression through Parliament to tackle uncertainty within the sector during its recent meeting with the Prime Minister’s housing policy unit, but policy director Chris Norris says he is concerned about how it will be implemented, rather than whether the Bill will be enacted.

Unlikely scenario

“We could have a new Labour government or a minority government with their own priorities and they might not agree, so it could fail,” he tells LandlordZONE. “However, that’s unlikely, as is the scenario of the government deciding not to schedule the next stages.”

Along with chief executive Ben Beadle, Norris met civil servants at 10 Downing Street to talk about court reform, how possession cases could be dealt with in a timely manner post-Section 21 and whether more court staff would be employed. They also called for selective licensing to be scrapped when the new property portal is introduced, as the new system will render it redundant.

Right to rent

Another topic was anti-landlord rhetoric within government departments as the NRLA has been disappointed with messages that could undermine the association’s work. Beadle points to the recent announcements on right to rent fines that give the impression landlords were to blame for those living in the country illegally, as well as statements on childminding in rental properties, calling on landlords to be ‘open-minded’ – completely ignoring major barriers including non-negotiable mortgage and insurance conditions.

View Full Article: Renters Reform Bill debate pushed back but still on track for June

PRS can grab a share of new insulation fund to save on fuel bills

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Landlords and tenants could be in line for some extra funding towards energy efficient improvements following the launch of the Great British Insulation Scheme.

This promises to boost help for those on the lowest incomes as well as extend support to a wider range of households compared to existing government-funded schemes. Those eligible for support include families in council tax bands A-D in England, A-E in Scotland and Wales, with an EPC rating of D or below.

Cavity wall

The £1 billion scheme is set to help more than 300,000 people save money on their energy bills for installing measures including cavity wall, solid wall and loft insulation. Along with homeowners, landlords and tenants are being encouraged to apply, with tenants asked to speak to their landlord first to get permission.

Support will run alongside the existing Energy Company Obligation (ECO) scheme, which offers free home energy efficiency improvements, such as insulation, heat pumps and solar panels to families on low incomes.

The offer is timely as the government has recently confirmed that it’s set to go ahead with the introduction of rules to raise properties in the PRS to an EPC band C by 2028.

Online tool

The online checker tool asks questions including how they heat their home, whether their home has solid or cavity walls, and if they are receiving any benefits. They will then be referred to their energy supplier for support and if eligible, it will arrange an assessment of the property. They can decide not to go ahead if they do not agree with the assessment or costs.

Lord Callanan, Minister for Energy Efficiency and Green Finance, (pictured) says: “Boosting the energy efficiency of homes creates the best long-term protection against fuel poverty for the most vulnerable. That’s why we are helping families with extra support to make their homes warmer, while saving hundreds on energy costs.”

View Full Article: PRS can grab a share of new insulation fund to save on fuel bills

Fast-growing Scottish rents top UK chart despite cap extension

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Landlords in Scotland hampered by rent controls have managed to drive annual rent growth faster than anywhere else in the UK.

Rents for new lets in Scottish cities are 15.6% higher in Edinburgh and Dundee and up 13.7% in Glasgow compared with a year ago, according to Zoopla’s rental market report for September, which reports that Scotland (12.7%) has overtaken London (12.4%).

Increases in rents for existing tenancies are capped at 3% a year but as properties become vacant, Scottish landlords can reset the rent to the full market rate. This means landlords are seeking to maximise the rent for new tenancies to cover increased costs and allow for the fact that future rent increases will be capped over the life of the tenancy, says Zoopla.

Final time

The Scottish government intends to extend the private sector rent cap for a final time until 31st March and this week, Tenants’ Rights Minister Patrick Harvie assured MSPs that it would “bridge the gap” for tenants once the emergency legislation expires. He said it recognised landlords might want to increase rents all at once following the expiration of the Cost of Living (Tenants Protection) Act and has therefore got the power to put rent adjudication procedures in place to facilitate the transition.

Annual increase

Zoopla’s research also finds that double digit rental growth means rental affordability across the UK is at its worst for over a decade at 28.4%.

Meanwhile, letting agents are frustrated by government policies that are pushing landlords out of the PRS and hammering their stock. The latest Royal Institute of Chartered Surveyors market report highlights immense tenant demand that continues to rise, according to a net balance of 47% of agents, across all regions and countries.

View Full Article: Fast-growing Scottish rents top UK chart despite cap extension

LSA selling landlord portfolios for higher than market value, faster than anyone else

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If you need to sell you no longer have to worry about Estate Agents taking too long, or auctions offering too low a price, portfolio exit specialists are the solution.

Over the last 12 months we’ve have had to deal with impossible rules and regulations that have put an end to property being a savvy decision when it comes to making money. Put simply, unless you’re a new landlord with fresh cash, our rents just aren’t enough to make our portfolios worth it.

Understandably, some landlords have been on the fence. In the current market, landlords have been struggling to get out, with many agreeing to knock off 30% equity expected back from their houses just to get rid of them. Refurbs have gone up to around £30K per property, and buyers are trying to knock £70K off the price of un-refurbed properties to cover costs and make sure they still get their margins. That’s why so many landlords are turning to portfolio exit specialists, and the results speak for themselves.

At Landlord Sales Agency we’re beating the market drop and are selling properties no matter what their condition. Aith 250 landlords approaching us each month, we get landlords the best possible prices as fast as possible so they can exit and reinvest elsewhere.

For portfolios that need a refresh, we have a team of builders who can help you achieve the refurbs you need to get your properties sold. We’ll manage the entire portfolio for you to prep for sale. In some cases, we can even give landlords cash advances for the refurbs, we’re that confident.

In the cases where properties need even more building help than we can offer, we have the team to get you the best prices regardless. How? We’ll throw everything at the properties including all of our contacts and resources to get them sold for a high price. We know exactly what it takes to sell tenanted properties without a single change to the portfolio and get the rents up to attractive rates for buyers without needing to evict and without the stress of you having to get involved.

Our extensive database of 30,000 buyers ready to buy our deals triggers a bidding war over your buy-to-lets the moment we list them, full of new landlords who don’t mind taking the work on with pre-existing tenants. They have fresh cash and fresh investment to weather the storm no matter how long it takes, allowing you to get out with the most equity possible.

For any tax issues or outstanding bills we’re partnered with Property118 to help you sort it all out for you. There’s absolutely no problem we can’t fix when it comes to selling your portfolios.

Make no mistake, the market has got to a point where it’s not easy to sell, but our team is able to adapt, fix the difficult issues, go above and beyond to solve problems and inspire each other to get the sales over the line.

What’s more, unlike auctions which will take a huge chunk of the sale, or estate agents who will make promises that can take months or years versus weeks, we’ll sell your portfolio fast, no nonsense, no fees to pay, and we’ll simply take our costs out of the profit, allowing you to walk away with around 85% – 90% of the value.

We’re completely transparent with everything we do, and communicate to both buyers and sellers to ensure you know you’re getting a deal that everyone is happy with.

There’s a bubble right now of landlords who need to sell urgently. We’re in the right place at the right time, but it’s important to act now.

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View Full Article: LSA selling landlord portfolios for higher than market value, faster than anyone else

Sharp rise in renters struggling to make ends meet

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A staggering five million households will be forced to spend more than a third of their income on housing by the end of the decade, according to a new study.

The National Housing Federation reveals the sharp rise in renters struggling to meet housing costs.

View Full Article: Sharp rise in renters struggling to make ends meet

Councils have more powers than the police when it comes to inspecting properties – Special Report

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All tenants have a right to quiet enjoyment, but can councils still inspect a property if a tenant and landlord refuse?

The answer to the question – which many landlords may find surprising – is ‘Yes’. Councils do have a legal right to entry and don’t need permission from the landlord or the tenant.

View Full Article: Councils have more powers than the police when it comes to inspecting properties – Special Report

Agency Fees Tax Q&A

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QUESTION

If a UK letting agent collects say £10,000 in rents from tenants and passes this onto landlords net of the agents 5% fees, what income does the agent need to declare to HMRC? Would it be the full £10,000 of rent collected or would it be his 5% agency fees only?

View Full Article: Agency Fees Tax Q&A

London in rent crisis as thousands of landlords tried to sell last year

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According to London’s CityAM reporter Laira McGuire, “Almost half of UK landlords have tried to sell their property in the last 12 months, as owners look to rid themselves of mortgage pressures in a worrying blow for renters.”

The claim is based on a study carried out by lettings platform Goodlord which interviewed around 2,000 landlords and estate agents. It found that around 77.5 per cent of those questioned in London blamed rising mortgage rates for those landlords putting properties on the market.

Section 21 in use

According to a recent study carried out by the housing charity Shelter, landlords are using the Section 21 eviction process while they can ahead of the implementation of the Rental (Reform) Bill, while the process is still available to them. It means that, according to Shelter, “notices pursuant to Section 21 of the Housing Act 1988 (as amended), are being served on tenants in the private rented sector every 8 minutes, which is the equivalent of 172 Section 21 notices per day.”

The Renters (Reform) Bill 2022-23, introduced in May of 2019, is the Government’s attempt at reforming the private rented sector in England, among other things, to remove the fear of evictions from private tenants. It intends to fulfil the Conservative Party’s manifesto commitment of abolishing the Section 21 eviction process during the Government’s tenure.

But progress on this has been slow and only 18 months or so before the next general election the Bill finds itself only on its second reading in the House of Commons. Given the complexity of the Bill it is looking doubtful it will make the promised Royal Assent by the end of 2023.

Mortgage pressures

The moves by hoards of private landlords to sell-up over the last 12 months – many looking to escape the mortgage pressures they are under while others fear they won’t be able to remove bad tenants when the new laws come in – is making life extremely difficult for tenants looking for good quality rental accommodation at the right prices.

Figures vary between 100,000 and over 150,000 landlord properties exiting the market over the last year but these are reliable figures based on HMRC returns and The National Federation of Residential Landlords (NFRL). Some estate agents have seen instances of as many as 17 prospective tenants queuing outside rental proprieties in London for a viewing.

Landlords are even asking tenants for CVs to assess their character, which is as a reflection of the demand from tenants and the fact that in England and elsewhere in the UK the private rented sector has such scarcity of rentals in what is now decidedly a totally landlords’ rental market.

Goodlord reports that 98 per cent of estate agents in London said that “at least one of their landlords was selling a property. As a whole across the UK, 47 per cent of the landlords have tried to shift their property in the last 12 months.”

The PRS and its landlords have gone through something of a perfect storm over the last 12 months with the turbocharging of interest rates following last year’s mini budget and the bank of England’s 14 consecutive interest rate hikes, sending borrowing costs higher than they have been for a generation. Many landlords have never experienced rates so high in their whole careers.

Along with many other new regulations being introduced into the PRS, the threatened tightening of the EPC targets to EPC rating of “C” by 2025 for new properties and 2028 for existing rentals has panicked some owners of older rental properties. They will likely need large amounts of money spending on them, and now with the advent of the Renters (Reform) Bill, for many its been the “final straw”.

House prices fall

One effect of this attempted sell-off is the added impetus to the fall in house prices generally, which so far this year has been in the region of 4.6 per cent. This is expected continue as estate agent responders to the survey stated that they expect more landlords to reduce their property portfolios over the next 12 months.

On the other hand, research by international agents, Hamptons says that rents are likely to rise by almost five times more than house prices between now and 2026. Hamptons is forecasting that rents will rise by 25 per cent between January 2023 and 2026, which will easily outpace the 5.5 per cent average growth prediction in house price rises over this same period.

A rental supply problem

Hamptons thinks that the long-term rental supply problem due to the factors stated above will mean that much of the costs will be passed on to tenants by way of increased rented biting deeply into many tenants’ disposable income. It looks like higher interest rates are here to stay for the long term, which will continue to weigh heavily on house sales and prices.

The trend spells out a difficult period for the UK’s 4.6 million private tenants who are seeing a shrinking pool of rentals available to the market. In their desperation to secure rentals, some potential have fallen foul of scams, such as fake rentals and stolen deposits, which have started to proliferate in a market with such growing scarcity.

According to Goodlord, 73 per cent of renters reported to them that finding a property to rent was “one of the most stressful things they have ever done.” The dwindling supply has also allowed landlords, when letting a new rental, to increase rents, very often achieving rents higher that the advertised price, due to the competition between competing prospective renters.

One agent, Mark Gray, director at Elevation Lettings reported that:

“When tenant contracts come to an end, they now look around the marketplace and realise that there’s little point moving to another property, as it’s likely to cost them another hundred pounds or more per month,”

Richard Davies, chief operating officer of Chestertons, has said:

“London has always experienced high demand from tenants which has been met as much as possible by private as well as corporate landlords,”

“With major changes such as the Renters (Reform) Bill being introduced as well as rising interest rates generating less profit for overleveraged landlords in particular, the market has seen some deciding to sell up.

At the same time, however, he says, “we are liaising with homeowners; not landlords; who delay their sale due to the weaker sales market and put their property on the rental market instead.”

In the debate about whether landlords are leaving the private rented sector in the numbers speculated in the media, and whether tenant demand really is a high as is claimed, the findings from the RentTech firm Goodlord and Vouch goes a long way to strengthing the claims that this is definitive proof of what is happening.

Their survey questioned more than 2,000 landlords, tenants and agents, and found that nearly all reported having at least one landlord selling at least one of their rental properties.

Goodlord’s chief executive, William Reeve, had said:

“We can see which forces are giving landlords pause for thought, where anxieties for tenants are coalescing, and how agents are preparing for change.

“The private rental sector is a vital part of our economy; we hope this report provides valuable insight to all of its stakeholders and encourages decision makers to take the steps which will boost confidence in the market, particularly for landlords.”

Tom Goodman, the managing director at Vouch, had said:

“Although it’s understandable to see rising concern from agents and landlords about the changes to come, it’s more important than ever to see the positive in this shifting landscape.

“Upcoming legislation is a real opportunity for letting agents to demonstrate their value to landlords and tenants, meaning clued-up letting agents will continue to thrive.”

As with all investing in financial markets, while some are selling in a depressed market for sales, others will be buying cheaply with a view to rent properties out; new opportunities begin to appear. For those landlords willing to navigate the new rules, and perhaps operate through a limited company to minimise the Section 24 tax rules, with tenant demand as never before, it could soon be the time to invest?

View Full Article: London in rent crisis as thousands of landlords tried to sell last year

Brighton looks to licence 23,000 properties under massive new scheme

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Brighton & Hove Council hopes to introduce a huge selective licensing scheme that would eventually cover 17 of the city’s 23 wards.

Councillors are set to give the go-ahead for a consultation into plans to introduce the scheme in areas where there is a clear link between poor property conditions, deprivation and private rented homes, in Kemptown, Moulsecoomb & Bevendean, Queens Park and Whitehawk & Marina. This would cover about 4,000 properties.

Government approval

The authority also wants the option of introducing a further scheme covering 13 wards in: Brunswick & Adelaide, Central Hove, Goldsmid, Hanover & Elm Grove, Hollingdean & Fiveways, Preston Park, Regency, Rottingdean & West Saltdean, Round Hill, South Portslade, West Hill & North Laine, Westbourne & Poets Corner and Wish. This would cover another 19,000 properties and needs Secretary of State approval.

An additional licensing scheme has also been proposed after the previous one ended earlier this year, covering about 1,900 smaller HMOs.

Licence fee

A 12-week consultation would begin in late September, with the first scheme potentially in place by July 2024. If agreed, the second scheme could start in summer 2025. A suggested fee of £670 would cover the five-year licence.

Councillor Gill Williams, chair of the housing & new homes committee, says: “Time and again we hear from residents about their poor experiences with landlords and uninterested letting agents, who fail to maintain their property and force tenants to live in sometimes disgusting, uninhabitable conditions. These proposed landlord licensing schemes will help tackle the problem of landlords who fail to manage and maintain their properties.”

Last November, the council introduced a tough new set of policies designed to reduce HMOs’ impact on local communities, relating to both new-build planning applications and changes of use to or from a single-family home to an HMO.

View Full Article: Brighton looks to licence 23,000 properties under massive new scheme

Extra funding on offer to make PRS more accessible for disabled tenants

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Landlords and tenants are being encouraged to apply for new funding to help older and disabled people make adaptations in their homes so they can continue to live independently.

The Department for Levelling Up, Housing & Communities has announced a £50 million fund that will be available as Disabled Facilities Grants (DFG) from local authorities in England, providing a tenant is living in the property that needs an adaptation. These grants can be used to fund up to £30,000 of works.

Improved access

The cash boost follows the government’s call for evidence on the Older Persons’ Housing Taskforce and Disabled People in the Housing Sector which Propertymark says it used to encourage improved access and better promotion of the grants to private landlords and their agents to ensure more PRS property is accessible.

It believes local authorities should be required to improve understanding of the number and needs of disabled people in their area, with data informing local development plans to ensure the right type of housing is provided.

Growing number

Propertymark says although tenants with disability issues need to be living in a property to access the DFG, landlords and their agents should consider ways they can future-proof their businesses by providing housing to the growing number of older and disabled people accessing the PRS.

According to the Older Person’s Taskforce for Housing, there are 12.4 million people in Great Britain aged over 65 (18% of the population), which is projected to rise to 20.4 million by 2041. 

The agent group adds: “We also used the call for evidence as an opportunity to reaffirm our call for a better relationship between local authorities and private landlords. One opportunity to do this could be that local authorities keep a database of adapted properties that they could signpost tenants to suitable properties.”

View Full Article: Extra funding on offer to make PRS more accessible for disabled tenants