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‘The Landlord’s Friend’: Paul Shamplina and Kate Faulkner Release Latest Edition of their Property Investment Book

Published On: May 10, 2019 at 9:36 am

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‘The Landlord’s Friend’: Paul Shamplina and Kate Faulkner Release Latest Edition of their Property Investment Book

With over 170 pieces of landlord legislation in place, we are grateful to have experts such as Paul Shamplina and Kate Faulkner to guide us through the world of property investment.

Originally launched in 2015, the property professionals have revised its content and released an updated version. The book aims to help both novice and seasoned landlords with navigating their way through the ever-changing private rental sector (PRS).

Paul Shamplina’s own experience comes from being a landlord and eviction specialist, and is featured on Channel 5’s ‘Bad Tenants, Rogue Landlords’. He has spent over 25 years in the industry and is the Founder of Landlord Action.

Kate Faulkner is the author of a number of Which? property books and is considered to be one of the UK’s leading buy-to-let experts. She appears regularly in the media, discussing the property market and current issues that affect investors.

From those looking into making their first investment, to experienced landlords, the book is there to help all looking for buy-to-let information. It comprises of 50 chapters in total, which are divided into three sections:

1.    Preparing got successful letting

2.    Letting your property

3.    Running your portfolio the right way

Paul Shamplina commented: “It’s hard to believe that it was nearly five years ago that Kate and I first published ‘The Landlord’s Friend’, and today, landlords have never needed a friend more.

“The Buy-to-Let landscape has changed vastly during this time, particularly with the constant changes to tax and now Section 21, meaning small landlords are seriously having to think whether they want to stay in the sector.

“However, I think it’s important to remind people that demand is still extremely strong, with the PRS making up 21% of our total housing sector and predicted to rise to 24% by 2021. All of these people need somewhere to live, and the government is under pressure to support a more professional sector that provides a safe environment for tenants.

“There is still very much a place for landlords who take their legal and moral responsibilities seriously, so we want to help landlords stay profitable while ensuring they do it the right way.”

Kate Faulkner commented: “Landlords are going through a tough time just now. Not only are they being hit by increased taxes, the changes in legislation to the Private Rented Sector are coming in thick and fast, with Local Authorities able to find landlords who make mistakes up to £30,000 for each breach. Meanwhile, tenants’ expectations of being delivered a beautiful home to live in rather than a temporary place to stay are increasing.

“The latest version of ‘The Landlord’s Friend’ helps to equip both new and existing landlords with the information they need to invest and run a buy to let property successfully.”

Rental Growth in London Presents Opportunity for Landlords

Published On: May 10, 2019 at 8:16 am

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Rental growth for property in the UK has increased by 0.96% in the year to April, according to the latest Landbay Rental Index. However, slow rents in London (0.66%) continue to weigh down on otherwise resilient rental growth in the rest of the UK (1.11%).

Landlords, this could be a prime opportunity for investment, if you have your eye on higher rental growth. Looking north of London, or even England, could reap rewards.

The highest year-on-year rental growth can be seen in Scotland, at 1.78%. Here, the average rent is £750, which is only slightly less than the UK’s average, when discounting London (£773).

In particular, Edinburgh City has the highest rental growth, at 5.44% year-on-year. Glasgow City and East Lothian are also doing well, at 2.59% and 2.21% respectively.

Heading over to Wales, results show the country to have experienced the second highest growth. However, rents are lower at an average of £658. The second highest rental growth in the UK is in Methyr Tydfil at 4.65%, whilst Blaenau Gwent is third at 3.92%.

In England, Nottingham has the highest rate of rental growth at 3.84%. Rutland and Leicester are also good options for landlords looking to move further north from London, with growth at 2.56% and 2.33% respectively.

John Goodall, CEO and co-founder of Landbay said: “Landlords can rest assured that there is decent rental growth to be found across the UK, particularly if they look north of London. On the face of it, landlords have had a tough time in the past few years, from increased regulatory pressure to a significant increase in stamp duty costs, yet they have managed to shoulder many of these costs without passing them onto tenants. For brokers, this provides them with the opportunity to give expert advice to their clients about changing elements of the housing market and which areas have the most potential in the coming months.”

UK Rental Market Analysed by Latest Surrenden Invest Report

Published On: May 10, 2019 at 8:05 am

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A new report looking at the UK rental market has revealed a strong and sustained demand for privately rented homes.

Surrenden Invest’s 2019 Rental Market Snapshot has considered the key drivers behind this boom in the UK’s private rental sector (PRS), as well as what it means to those who live and invest in it.

Jonathan Stephens, Surrenden Invest MD, said: “What we’re seeing is a continuing drive towards rented accommodation in the UK, with developers racing to meet the demand for contemporary homes in city centres. Tenants are seeking ever more experiential homes, with concierge services and exciting roof terraces becoming something of a must. 

“Investors, meanwhile, have largely shrugged off recent announcements, from the Brexit delay and potential Section 21 ban to Labour’s challenge to permitted development rules.”

In recent years, former office blocks have been converted into some 42,000 homes under the altered permitted development rules (PDR). Labour has proposed changing the rules yet again (following the Conservatives’ decision to change them back in 2013). This is due to permitted developments not being required to provide affordable homes or meet official space standards. However, there is the possibility that such a change may put further pressure on the UK’s limited supply of housing unless it is replaced with an alternative.

Stephens went on to say: “Investors in the UK rental market are increasingly unphased by issues such as the potential Section 21 notice ban and the talk of PDR rule changes. We’re finding that those who were determined enough to see out the increase in stamp duty and the phasing out of mortgage interest relief are in it for the long-haul – which is good news for the UK rental market, given the continually increasing demand for privately rented homes.”

Birmingham, Manchester, Liverpool, Newcastle and the London commuter belt are highlighted as key markets for rental properties. These hotspots provide the lifestyle that many tenants are currently after, as well as good yields and growth for property investors.

Currently, the North West holds the focus for capital growth, with new figures from HM Land Registry showing a greater rise in house prices than any other English region. Monthly growth was 1.3% between January and February, with an annual uplift of 4.0% in the year to February. 

Revenue from Landlord Licensing Schemes could improve Standards

Published On: May 9, 2019 at 10:27 am

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The revenue raised from landlord licensing schemes across the country could improve housing standards in the private rental sector, if reinvested into enforcing legislation, according to PayProp.

The lettings payment provider says that, if councils use this money to police an increasingly diverse private rental sector, this could benefit tenants, landlords and letting agents in the long-term.

It is estimated that around 16% of English local authorities have a selective licensing scheme in place, covering almost half a million rental homes.

On top of this, since October 2018, it has been mandatory for all landlords of Houses in Multiple Occupation (HMOs) to obtain a licence for their properties.

However, there are currently no obligations for local authorities to invest licensing revenue back into housing.

Recent research found that the average landlord license across the UK costs £591. This means that a typical council with a scheme in place raises £144,629 per year, with Liverpool City Council earning a high of around £4m from its scheme, which covers 42,000 properties.

Furthermore, despite rules that mean landlords can be handed civil penalties of up to £30,000 for non-compliance with a licensing scheme, the average fine for a licensing offence in 2017 was £926.

“Effective enforcement of rental sector standards is one of the biggest problems facing the lettings industry,” believes Neil Cobbold, the Chief Operating Officer of PayProp. “Landlords might be happier to pay for these licences if they know the money is going to be used to raise private rental sector standards and identify rogue operators.”

He continues: “Licensing schemes are sometimes criticised for being revenue raisers for local councils. However, if authorities are more open about where the money is going and more focused on reinvesting it into housing, licensing schemes could be more effective, with higher rates of compliance.”

The costs, terms and exceptions of licensing schemes vary depending on which local authority is operating the scheme.

For example, the cost of some licences is based on the property type, while others are based on the number of occupants or amount of rooms in a home.

“A standard approach to licensing could make projects easier to enforce, while making things less confusing and creating a level playing field for landlords,” Cobbold believes.

Last summer, the Ministry for Housing, Communities and Local Government announced a review of the selective licensing scheme, the results of which are expected for public release shortly.

“We await the results of the Government’s review of selective licensing with interest,” says Cobbold. “Effective enforcement and details on what licensing revenue is used for are two of the key topics that could be addressed.”

He concludes: “13 years after selective licensing schemes were first introduced, it’s encouraging that the system is still being reviewed to determine whether it is fit for purpose in its current form.”

Landlord Accreditation Scheme in Oxford is “Unlawful”, Insists RLA

Published On: May 9, 2019 at 10:01 am

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A landlord accreditation scheme in Oxford is both discriminatory and unlawful, according to the Residential Landlords Association (RLA).

A landlord accreditation scheme in Oxford is both discriminatory and unlawful, according to the Residential Landlords Association (RLA).

The organisation has written to Oxford City Council to oppose the scheme on the grounds that it includes conditions that breach European directives. In Oxford, all landlords of Houses in Multiple Occupation (HMOs) are required to obtain a licence in order to lawfully let their properties.

An estimated one in five of the city’s population live in an HMO.Under the current scheme, private landlords in Oxford accredited by the Council are able to obtain a longer HMO licence than those who are not, even if landlords are able to demonstrate expertise in alternative ways, such as through training. In a letter to the Council, the RLA argues that this is an unfair and unlawful policy, as longer HMO licences offer a financial and practical benefit for landlords, yet only landlords who are members of the Council’s accreditation scheme can take advantage of these longer licences at the moment.

The scheme also includes a condition demanding landlords to attend training sessions to become accredited. The RLA warns that this discriminates against those who live outside of Oxford or the UK but let properties in the city, and breaches the EU Service Directive, which clearly states that accreditation and licensing “cannot be provided in a way which discriminates based on country of establishment”.

The organisation is now calling for the Council to review the plan as a matter of urgency.David Smith, the Policy Director of the RLA, says: “It is very concerning that there are so many apparent illegalities in Oxford City Council’s accreditation scheme. “The RLA strongly urges the local authority to review the scheme, and would welcome the chance to meet with council representatives to discuss our concerns further.”

The RLA has threatened the Council with judicial review, should it not take action.Last year, the RLA threatened Great Yarmouth Borough Council with a judicial review over serious concerns about its selective licensing scheme.

Average House Price Up from £155,000 to £237,000 in 10 Years

Published On: May 9, 2019 at 8:54 am

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The average house price in the UK has surged from just £155,000 to almost £237,000 over the past ten years, according to the latest House Price Index from Halifax.

In April, the average UK house price rose by 1.1%, to £236,619. This compares to a decline of 1.3% in the month to March.

On an annual basis, house prices in the three months to April were up by 5.0% on the same three months of 2018.

Quarter-on-quarter, the average house price in February to April increased by 4.2% on the previous three months (November to January).

In April 2009, the average property value in the UK was £154,663 – a low point following the 2008 financial crisis. Since then, we have seen an increase of £81,956, representing 4.3% growth each year. 

The sharp 5% annual growth recorded in April this year sits against a backdrop of a particularly low rate of house price inflation over the corresponding period of 2018, impacting year-on-year comparisons. This also factors in a notably high growth rate recorded in February 2019, which was driven by a higher volume of London property sales and more expensive new build homes.

Halifax also looks at data from HM Revenue & Customs (HMRC), covering March this year, which shows that 101,830 home sales were recorded in the month. As in February, this figure was very close to the five-year average of 100,959. When comparing sales in January to March against October to December, a 0.3% rise was recorded. Home sales in March were 2.8% higher than the 12-month average.

Bank of England industry-wide figures show that the number of mortgages approved to finance home purchases – a leading indicator of completed sales – dropped by 4.6% to 62,341 in March. This rate is 3,793 below the five-year average monthly approval rate of 66,134, and 2,852 lower than the previous 12-month average of 65,193.

The March UK Residential Market Survey from the Royal Institution of Chartered Surveyors (RICS) again showed a subdued result for nearly every measure. The sales to stock ratio of 31.4% is now at its lowest rate since September 2013. Price and sales expectations showed a small improvement for the second consecutive month, but both remain firmly negative.

Russell Galley, the Managing Director of Halifax, says: “The average UK house price now stands at £236,619, following a 1.1% monthly rise in April, as demand and supply of housing remained subdued for another month.

“The index has seen a weaker pace of growth over the last three years, which is consistent with the easing of transactions volumes and housing market activity reflected in RICS, Bank of England and HMRC figures.” 

He adds: “Looking further back, this April also marks ten years since the lowest point of the Halifax House Price Index, following the financial crash in 2008. Over the past decade, annual house price growth has seen the average price increase by £81,956, or an average rise of 4.3% each year.”

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Lucy Pendleton, the Founder Director of independent estate agent James Pendleton, responds to the figures: “The blistering volatility of this index has returned, as the Halifax house price weather vane spins itself into a frenzy once more. 

“The index has already come under scrutiny this year, after months of erratic monthly growth figures. These can be more sprightly than the smoothed annual and quarterly numbers, but, even so, they’ve been turning heads with the extremes with which they have been moving. 

“This time it’s the turn of quarterly and annual growth figures, which have leapt up.

“By this measure for April, the housing market is still comfortably making money for homeowners in real terms.

“One explanation for ricocheting growth figures like this is persistently low stock levels. In sought after areas, this can lead to demand being supercharged one minute and gone the next, with price rises coming in waves, as brief competitions for limited numbers of homes come and go.

“Even so, the Halifax index’s behaviour so far in 2019 has been unusual to say the least.”

Conor Murphy, the CEO of mortgage advisor software provider Smartr365, also comments: “While there has been a recent 5% spike in year-on-year price growth, we need to bear in mind the particularly slower market performance for the same period in 2018. Monthly growth remains at just over 1%, and the activity we do currently see is being driven by first time buyers taking advantage of near record-low interest rates, as they try to get onto the housing ladder.”