Landlord Hero of the Week #5: Ethical Lettings

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As the rental market continues to cope with the challenges of Coronavirus, we highlight a company working its landlords to lessen its impact on their tenants.

As a community
interest company, Ethical Lettings does good on a regular basis, but the
pandemic bought out the best in its landlords too.

The social lettings agency works across Surrey and South West London in partnership with local councils to find affordable rented accommodation for its tenants who are all on benefits or low incomes, reinvesting its profits and funding extra support for those in need to improve their quality of life.

Its staff help with writing CVs, claiming benefits and work with local authority mental health teams.

Paying landlords guaranteed monthly rent in advance, Ethical Lettings is proud of a 98.7% rent collection rate across its 200 properties, but director Georgina Summerfield says before the lockdown she panicked that this would drop to 55% as tenants’ circumstances changed – a predicted £90,000 a month loss.

Wide of the mark

Luckily, it was wide of
the mark, says Summerfield.
“We’ve been in direct contact
with each tenant, working to maximise their income, assisting with benefit
claims, accessing Government funding and offering advice on various ways to
reduce expenditure.”

And as a result of this
hard work, Ethical Lettings’ rent collection rate for April topped 95%.

While its landlords were supportive – agreeing to a change in payment terms from the usual one month in advance to one month in arrears – the company in turn, has supported them.

She explains: “For those who would have experienced financial hardship as a result, we applied for a Government bounce-back loan and also created a landlord hardship fund to ensure they weren’t adversely affected.

“One of our landlords in South Africa couldn’t get hold of her mortgage provider to apply for a mortgage holiday so her rent was paid in full. Another was made redundant herself so her payment was made in full as normal in advance.”

Adds Summerfield: “Our landlords have been amazingly supportive – this crisis has really bought out the best in people.”

Read last week’s Hero Landlord story.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Landlord Hero of the Week #5: Ethical Lettings | LandlordZONE.

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Should I let to family through my limited company?

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As the title suggests, I’m considering getting a BTL via a limited company with the intention of letting it to family – who would claim housing benefit. The family already lives in a council flat and benefits from getting housing benefit.

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Long term rental of Furnished Holiday Let?

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We have received an enquiry for long term rental of 3 months for our Furnished Holiday Let (FHL), over our quiet period this coming winter and it appears quite tempting to take it.

We have been running this FHL over the last 5 years and have complied with the occupancy rules each year and fully qualify.

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Student rental market ‘fundamentals’ remain despite rent strikes and closed campuses, it is claimed

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Property giant Cushman & Wakefield admits student rental market faces huge challenges at the moment but says it still offers a long-term investment opportunity.

Global
property agent Cushman & Wakefield is bullish about the UK’s student
accommodation sector, despite gloomy predictions for the next academic year.

It’s just completed deals on two student accommodation blocks in Leicester and Edinburgh for £22 million; Dover Street in Leicester has 135 bed spaces while Goods Corner in Edinburgh (pictured) has 108 studio bed spaces. It says both properties have been 100% let with strong bookings for the 2020/21 academic year.

However, London Economics research suggests that more
than 230,000 fewer students will enter higher education as a result of the
crisis, over half of which are international students.

That fall in student numbers would translate into a drop in income of around £1.51bn from non-EU students, £350m from EU students and £612m from UK students opting to stay away.

Lost revenue

Universities UK, the representative organisation for
the UK’s universities, has also reported that institutions will suffer an
estimated £790m in lost revenue in the 2019/20 academic year. Cushman &
Wakefield’s student accommodation advisory team says about 44% of this figure was
due to accommodation rebates.

Russell Hefferan, partner in Cushman & Wakefield’s student accommodation capital markets team, says: “Whilst in the immediate term COVID-19 presents obvious challenges for the industry, this transaction provides an excellent example of the strong, long-term fundamentals student accommodation offers.

“Overall,
in the UK there is a healthy amount of student applications, with overseas numbers
ahead of 2019 according to UCAS. From 2021 there is also going to be a
continued increase in the number of UK 18 year olds coming through the system.
The demand and supply dynamics remain positive for the sector and it is in good
shape to weather the storm.”

Homes for Students will manage and operate both blocks.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Student rental market ‘fundamentals’ remain despite rent strikes and closed campuses, it is claimed | LandlordZONE.

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London mayor launches initiative to tackle illegal evictions, rental scams and sub-tenancies

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Sadiq Khan says he wants to help local trading standards officers and the police spot, deal with and report unethical and illegal activity by landlords in London.

Mayor of London Sadiq Khan has vowed to get tough on both rogue and unethical landlords by rolling out a training programme for local authorities and the police.

He’s now promoting courses for council housing and trading standards teams in how to deal with unlawful behaviour by rogue landlords including rent-to-rent scams, sub-tenancies, harassment and illegal evictions.

The Mayor’s team is also working with the Metropolitan Police to help officers better respond to illegal eviction calls; they can use his ‘Report a Rogue Landlord or Agent’ tool to log incidents they attend so that council teams can follow up with the tenant and start enforcement action if needed.

Homelessness

Khan believes many of London’s
private renters are facing imminent homelessness unless the Government provides
more support and acts now to properly protect them from eviction when the ban
is lifted.

He says some unscrupulous landlords
and letting agents are even ignoring the ban and threatening renters with eviction.

“Many
renters are just one pay cheque away from homelessness,” he says. “It’s
completely unacceptable that London renters should be facing a ticking timebomb
where they could lose their home.

“Suggestions that
landlords and their tenants agree ‘affordable repayment plans’ between
themselves is totally unfair, and unrealistic in many cases.” 

In April Khan set out his proposal for a ‘Triple Lock’ protection for renters, calling on the Government to increase welfare support for renters, make section 8 discretionary in court proceedings and scrap section 21 evictions.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – London mayor launches initiative to tackle illegal evictions, rental scams and sub-tenancies | LandlordZONE.

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Aldermore resumes physical BTL valuations in England

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Aldermore Bank is resuming physical mortgage valuations on rental properties for Buy to Let purchase and remortgage in England.

Strict social distancing and safety measures will be met in line with Government guidance released on 10 May. Aldermore will ensure a detailed risk assessment is undertaken ahead of a valuation appointment so that the safety of residents and surveyors is prioritised.

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DWP apologises to landlord over ‘service failures’ but takes TWO years to investigate case

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Mick Roberts says difficulties of arranging an Alternative Payment Arrangement and the time it took to investigate his case are ‘disgusting’ and a key reason why landlords are increasingly reluctant to take on Universal Credit tenants.

A landlord in Nottingham has received a rare apology from the Department of Work and Pensions (DWP) over problems he encountered while attempting to register an Alternative Payment Arrangement (APA) for one of his tenants.

Mick Roberts, who operates one of the largest private property portfolios in Nottingham, has told LandlordZONE that although he’s pleased a DWP Independent Case Examiner (ICE) found in his favour, he is furious that it’s taken two years to be delivered.

In summary, the ICE found that the DWP’s dealings with Roberts included providing contradictory information, dealing poorly with his complaints and causing a considerable delay in implementing his request for an APA for his tenant, who lives in the Rise Park area north of the city centre.

“It is clear after reading the report that you have not received the level of service you should expect from the UC team. Please accept our sincere apologies,” a DWP spokesperson said.

Direct payments

Roberts complained in March 2018 after the DWP failed to tell him that his UC47 form was incomplete, or to explain that – because his tenant had earned some money during the ensuing months – this would impact his UC direct payments.

The application subsequently stalled and the tenant fell into rent arrears, a situation that Robert claims was wholly caused by the UC credit system. He also complained that there were no such problems with the old Housing Benefit system.

These complaints were rejected in July 2018 and it is now taken two years for the DWP to find in Roberts’ favour.

“While a landlord has no rent coming in takes an ICE two, yes TWO years to look at the complaint.

“It’s disgusting. We need change and it’s one reason why landlords are reluctant to take on tenants in receipt of UC.

“We could solve half of the homeless problem in Britain if the DWP just paid the landlord the rent directly.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – DWP apologises to landlord over ‘service failures’ but takes TWO years to investigate case | LandlordZONE.

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Coronavirus: Councils delay introduction of licensing schemes

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Several local authorities have delayed the introduction of licensing schemes, during the current coronavirus pandemic. Earlier this year, Wirral Council confirmed that some areas of Birkenhead and Seacombe would be subject to selective licensing from 1st July 2020. On 13th May, Wirral Council confirmed that the scheme will now not come into force until 1st […]

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Blue-blooded landlord reveals why her tenants are paying their rent on time during pandemic

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Castle-inhabiting entrepreneur and 300-property landlord Emma Manners, the Duchess of Rutland, gives away some of her portfolio management secrets.

While many landlords are relying on a
mortgage holiday to keep afloat as their tenants struggle financially, one of
the country’s high-profile property owners has told a national newspaper that
all of her 300 tenants have paid up on time during the crisis.

The Duchess of Rutland, Emma
Manners (pictured), runs her property empire from Belvoir Castle in
Leicestershire, renting out houses and cottages in towns and villages around
the estate, as well as in neighbouring Lincolnshire and Nottinghamshire.

Her stately pile has
appeared in TV series including The Crown and its owner recently promoted her
own branded gin.

Manners has told The Daily Telegraph that her lack of money worries is due to extremely loyal tenants – some of whom have been renting from her family for 50 or 60 years.

While the noblewoman had worried that Covid-19 might impact their finances, she’s yet to experience a single late payment compared to a 10-20% rates in the wider market.

Vetting procedures

Her comprehensive vetting
procedure, conducting interviews herself rather than relying on others to
choose tenants on her behalf, is another positive says Manners.

“I interview all the
tenants and find out where they’re from and about their lives. We try to make a
community, such as inviting them to harvest festival and carol services every
year. We’re an extended family.”

Keeping existing tenants
happy has also helped her avoid costly void periods without a rental income. 

She says: “When you have a
portfolio of properties it’s always about the down time between tenants, so we
always look for people who want to be here for the long term and want to
settle. I don’t like the churn, that’s my key rule.”

That churn can be reduced
by continued investment in properties, and not raising prices to the point
stable tenants choose to look elsewhere, she helpfully advises.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Blue-blooded landlord reveals why her tenants are paying their rent on time during pandemic | LandlordZONE.

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Belvoir survey reveals decrease in COVID-19 related rent arrears

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A second survey of new COVID-19 related rental arrears conducted by Belvoir, the UK’s largest High Street property franchise, reveals that less than 5% of tenants across all four brands are in arrears. This compares to pre-lockdown arrears of 2%

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