Khan calls for short-lets licencing in London as Airbnbs hit 80,000

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Mayor of London Sadiq Khan has called on the government to bring in a licensing system for short-term lets in a bid to protect the capital’s housing supply.

More than 80,000 properties are listed on AirBnB alone – 50,401 of these are entire properties – which Khan says is exacerbating London’s housing crisis by pushing up rents.

It isn’t clear how many are being let for more than 90 days a year due to a lack of regulation or resources for local authorities, he says. A licensing system would allow them to limit the numbers of licenses issued in their area and avoid entire streets or blocks being turned over exclusively to short- term lets.

Generate cash

Charging for licences and enforcing business rates for properties let for more than 90 days would generate cash for councils, allowing them to run more effective enforcement activity against unregistered landlords.

Khan also wants ministers to back his call for new legislation requiring short-term lets platforms to share data with local and national government so decision makers can better understand how the sector is impacting the housing supply and local residents. 

Adds Khan: “We need transparency about how many properties are being rented out for longer than the rules permit, and accountability to local authorities and residents.” 

Last year, Camden Council recorded more than 4,400 short-term lets in the borough, of which 24% exceeded the 90-night limit. Leader Georgia Gould adds: “There are simply no meaningful consequences to deter people from breaching the current legislation and landlords regularly use avoidance tactics to bypass the rules.”

The mayor’s call to action comes as part of his response to a government consultation on introducing a registration scheme for short-term lets in England.

Read more about Airbnb and short lets regulation.

View Full Article: Khan calls for short-lets licencing in London as Airbnbs hit 80,000

How much will achieving an EPC band ‘C’ cost? I decided to find out at my BTL flat

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There has been much in the press about the looming EPC ‘tsunami’ about to hit the sector as the Government prepares to enact laws that will see all private rented homes required to reach a ‘C’ energy rating by 2028 at the latest.

LandlordZONE reported only last week that the official English Housing Survey estimates upgrading work for landlords will cost between £5,000 and £15,000 depending on the property.

The report revealed that energy efficiency improvement costs for most private rental homes work out at between £5,000 and £9,999 (46%), while almost a third (30%) could be improved for under £5,000.

At the other end of the scale, 19% of homes would cost between £10,000 and £14,999 to improve to at least an Energy Efficiency Rating (EER) band C, and a further 5% of homes would require £15,000 or more.

But there is growing unease about these figures in some quarters, particularly when many landlords quitting the sector cite the looming cost of EPC upgrades as a key reason.

I would point out that the Government has yet to reveal the final form of its new EPC rules following its consultation back in September 2020.

Real cost?

But what will an EPC upgrade to a minimum ‘C’ band really cost? I decided to put this to the test at my own rental property in South West London, a purpose-built two-bedroom ground floor garden flat built during the 1890s.

Some years ago it gained a weak ‘D’ rating and ever since, like millions of other landlords in the UK, I have been fretting about what to do about the looming deadline of 2025 or 2028, whichever the Government sets as the cut-off date.

Let’s remember, landlords of rental properties after these dates will have to provide proof of an EPC ‘C’ certificate in order to rent them out legally.

I enlisted the help of James Tanner, a qualified EPC inspector who I had talked to earlier this year about the real cost of green upgrades, to inspect my property.

Boiler bonus

The good news for me, and I suspect for many other landlords with elderly properties like mine all over the UK, is that this maisonette achieved a good ‘C’ following the recent installation of Worcester Greenstar 4000 25kw boiler.

This was not because I had particularly sought to ‘go green’ but rather the old boiler was leaking water and rapidly approaching the end of its life.

So for me, the cost of reaching a ‘C’ band EPC was £3,000 which, my invoice shows, included the supply and installation of the boiler.

Poor walls

This change alone helped the property reach the ‘C’ goal despite many other areas of the flat being ‘poor’ including a lack of any wall insulation, old fashioned double-glazing and drafty floorboards.

The upgrades required to fix these two areas of weakness, Tanner concluded, would cost between £4,000 and £14,000 for the wall insulation and £800 and £1,200 for the floors. But for this purpose, they were not needed.

Before readers breathe a sign of relief, I would point out that the apartment still produces nearly two tonnes of carbon a year, and that it is therefore a long way off being ‘zero emission’, the Government’s goal for the whole of the UK by 2050.

That aside, in the short to medium term, it is clear that some of the warnings that EPC upgrades will put landlords under financial duress and even bankrupt them, may be wide of the mark. In my case they were but for others with larger and less-well-built properties, they may not. Time will tell.

Nigel Lewis is editor of LandlordZONE.

View Full Article: How much will achieving an EPC band ‘C’ cost? I decided to find out at my BTL flat

Is the rental market still profitable?

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Over recent years, governments have tightened lettings legislation and increased the tax burden on landlords. Add on the current cost-of-living crisis, high mortgage rates, and the Renters (Reform) Bill making its way through Parliament, some landlords are understandably beginning to wonder if it’s still worth having a rental property.

How are prices and rents doing?

Rental income figures are currently robust. For the 12 months to May this year, ONS data shows:

• England +4.7% (excl. London)
• Wales +5%
• Scotland +5.4%
• N.Ireland +10% (year to March 2023)

Data from Zoopla shows that rents for new lets increased by 10.4% in the year to April (9.1% excl. London).

Can this level of growth continue?

Average UK rents as a percentage of earnings are now at their highest level for more than a decade (28.3%, versus a 10-year average of 27%), nevertheless, more than half of renters are reporting that paying their rent is ‘somewhat’ or ‘very’ easy, with only 15% saying that it’s ‘very difficult’.

In addition, spending 30% of earnings is considered affordable, so ‘on average’ there is still some room for rents to rise more, but this is very location specific. As a result, we’re expecting rental growth to slow, but certainly not stop.

Looking at average property prices, although Zoopla reported in June that sellers were having to accept offers that were, on average, 3.8% below the original asking price, we have to view that in the context of the excellent house price growth that we’ve seen over the past few years. 

Rightmove has reported that asking prices went up by 6.3% in 2021 and by another 5.6% in 2022, and their data for the last five years shows the average asking price has increased from just under £310,000 in June 2018 to around £375,000 in June 2023.

Even with prices predicted to fall by up to 5% by the end of 2023, most landlords should have seen good enough growth since before the pandemic for that not to be an issue.

In terms of rental income and capital appreciation, the figures look good. Our own Landlord Tracker revealed in June that landlords remain generally positive about the market: 68% plan to maintain their portfolio and 6% plan to expand it.

Is the Renters (Reform) Bill bad news for landlords?

Our view is that the vast majority of landlords, who already let in a very professional manner and look after their property and tenants well, shouldn’t be negatively affected as and when the Bill passes – assuming the contents doesn’t change much. This has been reinforced by our own landlord research – when asked ‘Will the bill change your approach to property investment?’, 40% said ‘no’, compared to 33% who said ‘yes’ (27% are currently undecided).”

Things to check as a landlord

If you’re still unsure whether to hold on to your rental property or sell, here are 5 things to check:

1. Check your cashflow. Put together a breakdown of all your ongoing expenditure and check that your property is still making money.
2. Know the property’s current value. Check what capital growth you have had recently, as this may well compensate for any loss in income or monthly profit.
3. Work out your break-even point based on mortgage rates reaching 7-8%. Calculate how much you would be paying if rates rose to 7-8% – would you still be making an acceptable level of profit or could you finance any losses until mortgage rates fall?
4. Could you refinance at a lower LTV? If your property has increased in value significantly since you last remortgaged, you may be able to secure a better interest rate by refinancing at a lower LTV.
5. Is the property still meeting your investment objectives? For example, if your investment priority was capital growth so you could realise a lump sum for your retirement, as long as the property is still covering its own costs, there may be no pressure to sell.

Before making any decision, we’d recommend you speak to local property experts, such as the Leaders team in your local branch, who can help advise.

View Full Article: Is the rental market still profitable?

Sadiq Khan demands licensing powers to clamp down on short-term lets

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The Mayor of London, Sadiq Khan, is demanding that he be handed powers to tackle London’s rented home supply which is being ‘decimated’ by short-term lets.

Fuelled by the likes of Airbnb, the capital has seen an explosion in short-term lets in recent years.

View Full Article: Sadiq Khan demands licensing powers to clamp down on short-term lets

Some landlords and letting agents treating migrants ‘heartlessly’ say campaigners

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Migrant communities face discrimination while navigating the private rental market, according to new research by Generation Rent and Migrant Organise.

Their poll of 126 migrant private renters found that 42% had struggled to find a landlord or letting agent to rent to them as a migrant and 21% found it difficult to produce a valid form of ID when looking for somewhere to rent.

Some allege exploitative and illegal treatment from landlords and letting agents; 17% reported they had not received any of the documents they were legally entitled to in their current tenancy and 30% had been threatened with eviction. Meanwhile, 57% had experienced mould or damp.

Chief executive Ben Twomey says: “Migrant renters are subjected to an exhausting, unsafe and heartless system, where they are disproportionately forced to bear the brunt of the worst of the housing sector.

The upcoming Renters Reform Bill must work to support all renters into safe and secure housing, including marginalised groups such as migrant communities.”

Exploitation

Maymuna Osman (pictured), organiser at Migrants Organise, believes the government’s hostile immigration system continues to put people at risk of exploitation, even in their own homes.

“Migrants living in temporary and private rented accommodation are consistently forced to face undignified conditions with mould, overcrowding, lack of privacy, damp, no heating/hot water and racist right to rent checks,” she adds.

“We need to remove border controls from housing. People should be able to live in safe, decent homes in their communities and this requires a universal housing standard for all.”

Read more: Leading lawyer asks landlords for help to reverse ‘morally wrong’ HMO rules

View Full Article: Some landlords and letting agents treating migrants ‘heartlessly’ say campaigners

Landlord who ‘ignored responsibilities’ given criminal conviction and £18,000 fine

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A landlord who failed to licence her six properties has ended up with a criminal conviction and hefty fines totalling nearly £18,000.

London Land Holdings Ltd, London Land Holdings 1 Ltd and sole director of both companies, Susannah Meisner, were charged with operating a property without a licence and failure to comply with a statutory nuisance abatement notice in relation to broken toilets in one of the properties in Greenwatt Way, Primary Road, Slough (pictured). 

Reading Magistrates Court heard that Slough Borough Council’s housing department had made many failed attempts to engage the landlords about selective licences and repairs.

Meisner told the court that the companies were set up to buy the properties and she had handed over control and responsibility to her husband.

She denied having any involvement with their day-to-day running. 

Delegated

Giving evidence, her husband Joel Fried said he had delegated everything to do with the property to another person and was under the impression the licensing had been done.

He confirmed another management company was now dealing with the properties. 

London Land Holdings was fined £3,236 with costs of £1,553, London Land Holdings 1 was fined £5,393 with costs of £1,553 plus a surcharge of £108 and Meisner was fined £4,228 with costs of £1,553. 

Councillor Puja Bedi (picgtured) lead member for transport, housing, highways, the environment and environmental services, says landlords can’t just ignore their legal responsibilities to tenants or ignore repeated contact from the council.

She adds. “We hope other landlords learn a lesson, will be responsive to issues reported and will ensure they have all the necessary licences to operate, for the protection of themselves and their tenants.”

The council has received licence applications from the newly appointed managing agent and will work with it to tidy up the site and make repairs.

Read more about licencing enforcement.

View Full Article: Landlord who ‘ignored responsibilities’ given criminal conviction and £18,000 fine

Rents rise at the quickest pace since 2016

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The UK’s renters have seen average rent prices rocket by 5.1% in the year to June, the highest annual increase since the records began in January 2016.

The rise was even steeper in Wales and Scotland, where rents jumped by 6.7% and 6.2% respectively.

View Full Article: Rents rise at the quickest pace since 2016

LANDLORD: ‘Why I’ve been exiting residential and moving into commercial property’

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A leading portfolio landlord in Northern Ireland has vowed to focus on the commercial sector after becoming fed up with the UK’s overbearing tax regime.

Ian Jackson, a Belfast-based property investor and consultant, has offloaded all but 40 of his 142 residential properties in the last few years – 20 of them in the last 12 months – and has started buying commercial properties instead.

“I’ve had to rethink my tactics which was driven by the changes such as Section 24,” he tells LandlordZONE.

“I bought commercial buildings some time ago but have decided to revisit that because the sector isn’t as affected by the tax issues and there is less interference – although it is still challenging, with different pitfalls.”

Jackson has properties in Northern Ireland, Manchester and Scotland which means dealing with three different governments, none of whom are interested in what landlords think.

This is a mistake, he says. “They’ll find out the hard way that zero foresight will cost them more than the extra tax from landlords.

Snapped up

The properties I’ve sold have usually gone to homeowners, which means there are fewer rental properties on the market, while every time we put something on for rent, it’s snapped up in a day.”

Jackson says the housing shortage is here to stay and doesn’t believe government will catch up, ignoring the warning signs and even hard data as they chase votes instead.

He reckons this attitude is particularly hard on new investors with less capital, so that anyone putting money into property will now be questioning their decision.

“It’s taking way too long for landlords’ voices to be heard. It may be too late for landlords like me who are wanting to get out, but the government certainly needs to support younger investors,” he adds.

Find out about protecting your commercial property.

View Full Article: LANDLORD: ‘Why I’ve been exiting residential and moving into commercial property’

Police forces launch cannabis farms campaign targetting landlords

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Police forces across four big UK counties have united to urge landlords and letting agents to join them in their fight against cannabis factories in rented properties.

Four Police and Crime Commissioners or PCCs (main picture) in the southwest counties of Wiltshire, Avon and Somerset, Devon and Cornwall are calling on landlords, letting agents and housing companies to help them drive drugs off the region’s streets.

Specifically, the commissioners want those who rent properties to identify and report suspected cannabis farms.

They are also asking landlords to write to their national trade to raise awareness and ask for greater collaboration to fight cannabis cultivation in communities.

The initiative is part of a region-wide drugs campaign by the commissioners and their police forces known as Operation Scorpion.

It is focussing on the supply chain by organised crime groups and associated crime, in particular cannabis cultivation.

The latest aspect of this is targeting the private rented sector, with landlords and agent being asked to watch out for:

• Tenants who ask for complete privacy – requesting no periodic inspections.
• Blacked out windows and frequent visitors throughout the day and night.
• Light source coming from a property even during the night.

The campaign also includes how letting agents housing companies have a legal obligation to report any concerns, what information should be reported and how to file a report.

Wiltshire Police and Crime Commissioner Phillip Wilkinson (third from left), says: “Communities where drugs are cultivated and dealt are simply fed up with the misery this type of crime brings to their doorsteps.

“Criminals target properties for cultivation and we are calling on all landlords, letting agents and housing companies to be wise to the types of activity that could be happening in their properties.

“This is why we must tackle the issue of cannabis cultivation head on, and this collaborative approach between myself and the other PCCs reinforces the message that no matter where you live in the South West, there is no place for drugs.”

Read more: Landlord who allowed property to be used as cannabis farm jailed.

Main picture: David Sidwick, Dorset PCC, Mark Shelfold, Avon and Somerset PCC, Philip Wilkinson, Wiltshire PCC and Alison Hernandez, Devon and Cornwall PCC

View Full Article: Police forces launch cannabis farms campaign targetting landlords

Co-Op Bank gets in bed with Shelter to make wild claims

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First, it was a claim by Generation Rent that families are being evicted every 15 minutes – but now Shelter has gone one better by saying a family is evicted every EIGHT minutes in England.

The charity says it has calculated the figure by using the number of families living in the private rented sector from the English Housing Survey –

View Full Article: Co-Op Bank gets in bed with Shelter to make wild claims