Mary Latham: how to survive the Coronavirus-troubled student rental market

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The high profile industry trainer and long-time landlord reveals how the student rental market has changed and what landlords can do to get through these strange times.

“In 2018-19, of the full-time and sandwich
students studying in the UK, only 19.4 per cent of undergraduates and 15.5 per
cent of postgraduates lived in provider-maintained property, or in student
halls owned by a university or college. At least 29% lived in accommodation
rented from smaller private landlords” Source Officeforstudents.org.uk

The student letting
market is a micro market within the private rented sector, unlike any other
tenant group, and you either love them or hate them but it cannot be denied
that students are a significant part of demand for private rented
accommodation.

 I love them and I do my best to keep them safe
(often saving them from themselves) and happy while they enjoy a time of their
lives which probably won’t ever come again.

Covid19 has caused me stop and re-think a routine with which I have been
familiar for almost 50 years.  My concern
is that some landlords haven’t got the information or experience to understand
the issues which are not immediately obvious. I am writing this for those
landlords in the hope of helping them to avoid making expensive mistakes at a
time when you don’t need any further stress.

Legal Considerations

Possession:

Possession
means that the property is in your control it doesn’t mean, as some people
think, that you own the property.

• We give
  the keys to a new tenant – that tenant now has legal possession. Even
  when he doesn’t pay the agreed rent, even when there is no signed contract,
  even when a signed contract has come to the end of the fixed term.
• How do we
  regain possession – there are ONLY two ways

1. The tenant surrenders the tenancy and
returns the keys to the vacant property

2. Enforcement of a Court Order, either when
the tenant leaves voluntarily on the date the Judge decrees or when a Bailiff
enforces the Court Order and gives you back possession.

• When is it
  illegal to take possession – When
  the tenant doesn’t want to leave, even when the end of the fixed term has
  arrived or the date decreed by the Court Order. Landlords cannot enforce a
  Court Order, force a tenant to leave for any reason whatsoever, move contractors
  or new tenants in while the property is occupied by even one of the original
  tenants.  NB.

The purpose of this
article is to protect the many landlords who only let to students and who are
used to the annual migration from one property to another on 1^st
July or thereabout. Those landlords who need to read this have no experience of
having a group of tenants who are on the doorstep with their worldly goods,
waiting for access only to find that the previous tenants haven’t moved out nor
do they intend to at that time

Those of us who let
to non-students know that it is risky to re-let a property until we are certain
that we will have vacant possession from the previous tenant and we certainly
wouldn’t allow new tenants to rock up until we had checked that the previous
tenants had moved out, carried out an inspection and collected the keys.

This is however
quite common in the student market where it’s not unusual for the outgoing
group to be passing the incoming tenants in the hall.  It’s often chaotic and stressful but it’s all
part of the charm of letting to students. Ask any cleaner who has been on her
hands and knees while people are moving both in and out. Often landlords get a
kick in the pants when they need to go through the arbitration process of the
deposit protection scheme and they have no check in or out inventory.

All well
and good but not this year!

This is the year where the cycle was broken in the student community.  No viewings for weeks, some members of the group gone home, some stuck abroad and some still living in a rented property but with no property in which to move. Then there are those who did sign a contract for a new property but are now stuck with people dropping out of the group and the fear of being responsible for the rent for the whole house because they all signed a joint tenancy with deposits and guarantors.

What does
this mean for landlords?

We need to learn and act quickly.

First a word to those who are thinking “I’ve got signed contracts and they are responsible for the rent for
the year whether they move in or not” Good luck getting a judge to award
you 12 months rent. Google force majeure
and you will see why.

Some words of advice from Paul Shamplina of Landlord Action:

“I’ve had numerous calls from Student landlords affected by this pandemic and the fear that students will not move in to their properties as Universities are closed.  I had one agent who had 30 students refusing to pay their rent on the advice of their University. 

If landlords have pre contracts signed, but not executed with tenants refusing to move in, I think open lines of communication , practicality and common sense has to prevail, mediate. The Government have made it clear that students have to pay their rent and of course they will have their parents as guarantors.  If a student refuses to move in, the landlord cannot afford that property lying empty for the term of the tenancy and risk trying to pursue the student for unpaid rent through the courts,  who knows if a judge deems this contract broken under terms of Force Majeure.   I know some landlords are now looking to convert HMOS back into family homes so they can let ASAP. This pandemic has caused crisis especially in the student rental market.”

Government guidelines

We need to manage
the situation carefully, following government guidelines for viewings and for
moving home.  These are for England

http://www.legislation.gov.uk/uksi/2020/500/contents/made

The Scottish
Government have said that they plan to allow the property market to reopen on
18^th June.

Up dates from Welsh
Government

https://gov.wales/staying-home-and-away-others-guidance

Up dates for
Northern Ireland

https://www.communities-ni.gov.uk/landing-pages/covid-19-housing

Plan of action

Contact
each individual existing tenant and ask:

• Are
  they and their families well?
• Are
  they still in your property? If not have they moved out completely?  If they are still there, what are their plans
  for the end of the tenancy?

This will tell you
where you stand.

Some of them will have returned home but
without all of their belongings, if this is the case you need to ask whether they have a new property
to move into for next year.  The answer
will open a discussion about when they intend to move out. We may need to take
a hit on the cleaning bill this year (the tenant fees ban prohibits us charging
for this) or we can reclaim from their deposit – probably not a great idea and
if you get vacant possession on the last day of the tenancy be grateful and
move on.

Some of them will tell you that they have
already moved out lock stock and barrel don’t be tempted to ask for the keys to be returned early unless they
offer, unless you want to give them a rent refund but make it easy for them to
return them to you before they come back to move into a new property – offer to
pay for the postage

Some of them will be in the property, often
alone and unable to return home or without family support in the UK; a problem and an opportunity.  Send them a pizza and ask if they need any
help either now or at the end of the contract. It’s worth transporting their
belongings to another student house to get your own back with vacant
possession.

If you have tenants
who are still in the property and who have nowhere to move to this could be an
opportunity to fill a room where one person has dropped out of the group or
find another landlord with an empty room, make his day and enable your tenant
to give you your property back without pressure.

If you end up with a tenant who won’t move out you need to go through a lengthy Possession Process under Section  21 of the Housing Act 1988.

Whatever happens DO NOT ASK OR TELL THE TENANT TO MOVE OUT… THIS IS AN ILLEGAL EVICTION AND CARRIES VERY HEAVY PENALTIES INCLUDING LOSING YOUR “FIT AND PROPERTY PERSON” STATUS WHICH PREVENTS YOU BEING THE LICENCEE OF AN HMO.

Find a landlord with an empty property and
organise a viewing or virtual viewing for the students who cannot now move into
your property.  Otherwise you will face a
claim for Breach of Contract on top of everything else.

Letting the property

If you’ve got empty properties or rooms:

Do not waste time
arguing with students or guarantors, don’t count the cost, communicate with
your existing and new students and offer them money if they let a room for you.
Post on Face Book Groups and any online letting sites. Contact local landlords,
local letting agents and anyone in the university who may want to help to make
this less painful than it needs to be.

Remember if you
can’t get a group of students there are other groups who might like to live in
a lively young area just be careful not to let to a family if your property is
in an Article 4 Area because you will lose your Established Use as an HMO

There will be some
students who were due to go abroad for next year and others who were due to go
on placement, many of them will return to their university, even where much of
the learning is online and they will need accommodation, this may go on
throughout the summer stick with it.

How online learning
will impact on the student market it a discussion for another day.

Remember to continue to protect yourselves,
your contractors and your tenants. I wish you luck at this stressful time.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Mary Latham: how to survive the Coronavirus-troubled student rental market | LandlordZONE.

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Ambiguous CMA guidance over student lets

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The Government’s Competition and Markets Authority (CMA) has told Landlordzone that its recent pandemic emergency guidance could cover students lets where public health instructions under lockdown have precluded the use of rental property.

The Coronavirus (COVID-19) pandemic

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Is this the beginning of the end for dodgy property investment gurus?

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Accreditation scheme has been launched to protect consumers by requiring trainers and courses to stick to the highest standards.

Tougher policing of the property investment education sector has taken a step forward this week following the launch of an accreditation scheme for those conducting courses.

The scheme will require those in the scheme to be ‘fit and proper’, not make unverifiable claims, allow their course materials to be inspected, offer customers a complaints procedure, offer money back guarantees on one to five-day courses and not act dishonestly.

As LandlordZONE has been reporting for some time now alongside many other media organisations including Property Tribes, Daily Telegraph and the BBC, the property investment education sector is doing its best to eradicate the small number of unethical operators who continue to undermine public trust in property investment courses and advice.

Reports of financially inexperienced people being persuaded to sign up to expensive courses of questionable educational value have become more common, including about the most high profile one, Samuel Leeds.

He was the subject of a BBC investigation which featured the tragic case of former soldier Danny Butcher who killed himself after trying to clear his debt by paying for a £13,000 course run by Leeds and his organisation, Property Investors.

To help bring higher standards and greater transparency to the sector the Property Investors Bureau has launched the Property Educators Accreditation Scheme (PEAS) following a three-month consultation.

“PEAS aims to bring much needed change to the property education sector and will act as a catalyst for improving standards and increasing consumer protection,” says Cyril Thomas, Chairman of PIB.

“We are enthused by the vast support for the scheme and will continue to embrace all who want to be a part of the solution.”

By becoming accredited through PEAS, credible property educators are able to differentiate themselves from less credible operators as well as being automatically signed up to the Property Redress Scheme which will adjudicate any complaints against them.

Several high profile names have already signed up to PEAS including Simon Zutshi of Property Investor Network, Gill Fielding of Fielding Financial, Kevin Wright of Positive Property Finance and John Howard.

Find out how to join the scheme.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Is this the beginning of the end for dodgy property investment gurus? | LandlordZONE.

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Scots landlords face a long and expensive wait to get properties back following Coronavirus

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As housing charities call for the government to extend its evictions moratorium into 2021, landlords are warning that many of its ranks will face bankruptcy even under current restrictions.

The Scottish Association of Landlords (SAL) has warned that it could take until this time next year for landlords to repossess some properties if the current eviction moratorium is extended, putting many at risk of going out of business.

Charities including Homeless Action Scotland and Unison Scotland have issued a joint call to the Scottish Government to extend the current moratorium beyond the current time-frame of up to six months, and to only decide on lifting it after the restrictions around COVID end.

Homeless Action Scotland says: “The Scottish Government
has given a handout to landlords with the passing of the second Coronavirus
Bill. We recommend that the Scottish Government now considers giving a hand up
to tenants.” 

However, SAL believes that even if the
First-tier Tribunal re-opens in July, there would be a large backlog of cases
and this could mean that landlords need to have suffered at least 12 months of
rent arrears before getting an eviction.

“If a tenant hasn’t paid rent from the start of lockdown, it would be the end of June before they can issue the Notice to Leave – this six months’ notice takes it to December before you can make an application to the First-tier Tribunal,” chief executive John Blackwood tells LandlordZONE. “Most landlords can’t sustain such long-term losses.”

He adds: “We’re encouraged to hear stories
where landlords are working with tenants to arrange re-payment plans. However,
many landlords are not able to access financial support and inevitably will go
out of business. We must do everything we can to avoid this happening.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Scots landlords face a long and expensive wait to get properties back following Coronavirus | LandlordZONE.

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£100,000 Coronavirus emergency donation by Paragon

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The Buy to Let specialist Paragon Bank has split a £100,000 between the NHS, Solihull Change into Action, Age UK and the company’s 2020 charity, Macmillan.

Nigel Terrington, Paragon Banking Group Chief Executive, said: “Coronavirus is impacting on all of our lives and we hope this donation will help make a difference to some of the charities that are doing fantastic work in these difficult circumstances.”

NHS

The donation to the NHS will go towards helping frontline staff who need accommodation and food whilst they care for patients

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UK’s leading commercial landlord reports £1.1 billion loss as it collects just 43% of rent

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Retail and office giant sees losses rise nearly four-fold as its core markets are battered by both the Coronavirus crisis but also retailers struggling against online competition.

One of the largest and most powerful
commercial landlords in the UK is reeling from the effects of lockdown on the
nation’s shopping habits.

British Land,
which owns shopping centres around the UK and
office properties in London, suffered
a £1.1 billion loss in the year to the end of March – three times higher than
the £319 million loss it reported a year ago.

Pressure on retailers from higher costs and online competition affected property prices, while shop owners struggling with a massive hit to their income also meant the landlord only collected 43% of retail rent due in March for the current quarter.

It accepted lower rents and shorter leases for some shops to maintain occupancy while tenants falling into administration or using insolvency procedures to cut rents or close shops affected 118 units.

Rent reductions and store closures accounted for £11.3 million in lost
rental income; British Land has written off £2 million in rental income to
support small retailers and has agreed about £35 million of rent deferrals from
those facing financial difficulties.

Chief executive Chris Grigg says: “This was
already a difficult year for retailers, many of whom have been severely
impacted by the lockdown and the early effects of the crisis were reflected in
the value of our retail portfolio.”

British Land believes that as the lockdown eases, it’s well placed to respond to new ways of shopping as retail parks are more conducive to mission-based trips and social distancing while it’s currently progressing 220,000 sq ft of office deals under offer with a further 160,000sq ft being negotiated.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – UK’s leading commercial landlord reports £1.1 billion loss as it collects just 43% of rent | LandlordZONE.

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£18.49bn of Bounce Back Loans agreed

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HM Tearsury publish management information each Tuesday for each of the three Covid-19 emergency loan schemes schemes (CBILS, CLBILS, BBLS), including: The total number of applications, number of approved applications and the value of loans approved.

The applications figure includes approved applications

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Agreed rents drop steeply in key areas of London, leading agency reveals

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While the property industry has been keen to talk about a surge in pent up demand within the housing market, in reality over supply and the effects of tenants’ financial insecurity are driving agreed rents down in the capital.

An alarming drop in agreed rents in London has been revealed by one of its leading property firms, which also says rents in the capital are unlikely to rise ‘for quite a while’.

Hamptons International says that while rents have dipped by only 1.3% on average during the first four months of the year, this masks reductions in rents achieved of nearly 8% in some areas.

These figures suggest that many landlords have been forced to drop their asking rents to attract tenants during the first five months of the year, no doubt in part due to the Coronavirus crisis, a trend that may spread out of London

Hamptons International says rents dropped by 5% in central London, 6.9% in Zone 2 – such as Fulham, Clapham and Hammersmith – and by nearly 8% in Zone 3 (e.g. Tooting, Tottenham, Golders Green).

Further out into suburbia, Hamptons International says it’s a very different pictures with rents rising in Zone 5 and by 2.2% in Zone 6. But despite the reductions in agreed rents, they continue to vary significantly depending on where you look, from £2,910 per property in Zone 1 to £1,370 in Zone 6.

Hamptons International’s chief housing analyst Aneisha Beveridge says the price falls are down to an imbalance of supply as landlords try to fill vacant properties set against tenants who are reluctant to move, and that many tenants feel financially insecure and unable to afford more expensive properties at the moment.

“I don’t think we understand the hit to people’s affordability yet, so I don’t expect rents to rise again for quite a while,” she says.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Agreed rents drop steeply in key areas of London, leading agency reveals | LandlordZONE.

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Campaigning website accuses Airbnb hosts of flouting London’s 90-day limit

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As Airbnb prepares to recommend whether hosts should face mandatory registration, Inside Airbnb says up to 40% of short-let properties in the capital are being run year-round as professional accommodation.

A campaigning group which monitors Airbnb listings in the UK has claimed that 40% of the platform’s properties in London have been breaking the 90-day rental limit agreed for the city.

Inside Airbnb, which is a privately-funded website that offers landlords and tenants free tools to analyse Airbnb listings in cities throughout the world including London, claims that some 35,250 Airbnb listings in the capital are entire vacant homes that it classes as ‘highly available’ year-round for tourists.

It claims that these ‘could be illegal’ because many landlords use both Airbnb and other platforms to rent their homes out and circumvent the 90-day rule.

Airbnb currently lists 87,235 properties in London, although the platform has been blocking bookings nationally during the Coronavirus crisis.

The Inside Airbnb data is mentioned within a new document published by The House of Commons Library to brief MPs ahead of next month’s expected report from Airbnb following a 10-month tour of the UK by its executives.

This report will recommend the best way forward but is expected to suggest a system of property registration across the UK for short-term rentals and, if they adopt proposals already put forward by Mayor of London Sadiq Khan, require property owners to register their properties before they could be rented out.

The government has, effectively, outsourced regulation of Airbnb and its competitors to the Short Term Accommodation Association which it has made the lead body to oversee suppliers in the sector. An attempt by Labour MP Karen Buck to introduce legislation failed after it ran out of time in parliament.

See the data on London.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Campaigning website accuses Airbnb hosts of flouting London’s 90-day limit | LandlordZONE.

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£1bn fund to remove dangerous cladding to support private leaseholders

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Building owners have been urged to act and put the safety of residents first as the government’s £1 billion Building Safety Fund to remove dangerous cladding was launched by Housing Secretary Robert Jenrick.

It comes as the government published the prospectus for the fund which will meet the cost for remediation of unsafe non-ACM cladding systems on residential buildings in the private and social sector that are 18 metres and over and do not comply with building regulations.

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