Posts with tag: landlords

Many landlords unaware of Right To Rent obligations

Published On: February 15, 2016 at 10:08 am

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Landlords are once again being warned that they must comply with the regulations of the Right to Rent scheme, with a shocking new survey suggesting that the majority are unaware of the changes.

An investigation carried out by the Residential Landlords Association (RLA) revealed that 72% of landlords do not understand their duties under the policy. More alarmingly, 90% said they had received no information about the new law before it was rolled out nationally on 1st February.

Concern

There is tangible concern in the buy-to-let sector that many landlords are at risk of a £3,000 fine, as a result of not carrying out the correct checks.

Maynard Burton, a partner at law firm MFG solicitors, said that he was becoming increasingly concerned that landlords will be caught out. He noted that, ‘landlords who do not act face fines of up to £3,000. That’s potentially ruinous for someone who is self-employed and I’m concerned, as are other specialists, at just how few landlords have grasped not only their obligations, but the implications for them.’[1]

Many landlords unaware of Right To Rent obligations

Many landlords unaware of Right To Rent obligations

‘They really need to get advice immediately on the checks they should be making and the records they should be keeping,’ he added.[1]

Right To Rent Duties

Designed to make it more challenging for illegal immigrants to rent and ultimately stay in Britain. However, critics say that that the scheme makes landlords carry out duties to carry out checks normally conducted by trained immigration officers.

Burton went on to say, ‘it’s easy to sympathise with landlords who feel that these new rules are effectively turning them into unpaid immigration officials. Equally, it’s easy to feel frustrated at the lack of information that has been given out by the authorities. But the law is here and it’s in force. Landlords have to act now.’[1]

[1] http://www.propertyreporter.co.uk/landlords/landlords-warned-over-immigration-check-fines.html

 

Landlords’ confidence, ‘at all-time low’

Published On: February 14, 2016 at 11:11 am

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An alarming statement by the CEO of the National Landlords Association (NLA) has painted a worrying picture of the current state of the buy-to-let sector.

According to Richard Lambert, confidence in the market is at an all-time low and is, ‘worse than levels witnessed during the financial crash.’[1]

Tumbling

Mr Lambert will address peers at the Building Societies Association’s annual meeting and is expected to say that confidence in landlords’ business expectations have slipped by more than a third in the last year. He believes it is fallen from 67% to a record-low of 43%.

If he is to be believed, the current level of confidence in the BTL sector is 5% lower than levels seen after the financial crash of 2007.

Also in his address, Lambert will highlight how the actions of the Chancellor in the Budget and Autumn Statement has led the NLA to backtrack on predictions of growth in the sector. Originally, the NLA suggested that the sector would grow by more than one million households in the next five years.

Now, the firm suggests that if landlords act as predicted, there will be a sharp sell-off of properties of up to 50,000 in the next year. This will be followed by another 100,000 properties sold every year thereafter to 2021.

Landlords' confidence, 'at all-time low'

Landlords’ confidence, ‘at all-time low’

Bleak findings

Lambert will also present findings from the NLA Quarterly Landlord Panel survey, which shows:

  • The number of landlords looking to sell in the next year has doubled from 7%-19%
  • 28% of landlords do not plan to add to their portfolio
  • 10% plan to reduce their housing stock
  • 5% intend on selling their entire property stack

‘Two speeches from the Chancellor in 2015 have led to a crisis in confidence greater than when all but a few BTL products were immediately withdrawn from the market following the 2007 financial crash,’ Lambert said. ‘Up to half a million properties could come onto the market as a result of the Summer Budget and Autumn Statement, which the Chancellor will no doubt deem a success.’[1]

Continuing, he said, ‘there is no guarantee that these will be the one or tow-bedroom flats of small houses that will appeal to first time buyers, especially as landlords are more likely to offload less desirable stock in less desirable areas.’[1]

‘We’ve always said that Mr Osborne is blinded to the impact of his decisions by his commitment to homeownership. He may have intended to focus on the small-scale part-time investor, but it’s the larger and more professional landlords who will be hit worst by cuts to mortgage tax relief and increases to stamp duty and who appear most likely to leave the sector,’ he concluded.[1]

[1] http://www.propertyreporter.co.uk/landlords/landlord-confidence-crashes-to-all-time-low.html

 

Carry out mid-term inspections now, urges AIIC

Published On: February 13, 2016 at 10:01 am

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Landlords are being advised that now is the perfect time to carry out a mid-term inspection of their rental property.

The Association of Independent Inventory Clerks (AIIC) is calling for prompt inspections as many homes could be suffering from mould, generally caused by condensation issues.

Prevention

In order to prevent the problem from escalating, the AIIC urges landlords to carry out these checks on properties in the next few weeks.

‘Mould can be caused by a lack of ventilation or incorrect drying of wet washing-even if just one tenant is living in the property,’ noted Patricia Barber, Chair of the AIIC. ‘It can also be caused by on-going leaks both inside and outside the property, blocked gutters and missing roof tiles.’[1]

If mould is found to be present in a property, the AIIC advises that landlords should ensure that this is not due to external factors, lack of ventilation or any other issue that they can easily solve themselves.

Carry out mid-term inspections now, urges AIIC

Carry out mid-term inspections now, urges AIIC

Instructions

On the other hand, if a build up of mould is being caused by substandard living conditions, the landlord should inform their tenants of actions required in writing.

These should include:

  • reference to ventilating the property
  • wiping down walls and windows
  • using extractor fans
  • not putting damp washing on radiators or heaters
  • rubbing down and mould spores as soon as they are noticed

Barber concluded by saying, ‘if mould is not dealt with on a regular basis the resulting damage could cause both tenant and landlord a lot of money at the end of a tenancy.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/2/landlords-urged-to-carry-out-mid-tenancy-inspections

 

Two-thirds of tenants saving for own property

Published On: February 12, 2016 at 11:28 am

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An interesting new report suggests that over two-thirds of tenants are saving for a deposit and are willing to move away from family and friends to get onto the property ladder.

A study conducted by PropertyLetByUs.com, one of the leading online letting agents, also shows that just under a third of tenants have given up on owning their own home.

Moving

46% of tenants said that they would only be able to afford a property if they were to move to a cheaper area. One in six said that they would consider a lodger to help them with their mortgage costs.

When asked how long they thought it would take to purchase a property, one third said within the next two years. Almost 20% said that they would be able to afford a home in the next three years, with 4% thinking it would take five years.

Over half of tenants aspire to move up the rental ladder before buying their own home, with 51% stating their intent to move to a nicer property when they can.

Two-thirds of tenants saving for own property

Two-thirds of tenants saving for own property

Saving

Jane Morris, Managing Director of PropertyLetByUs.com, noted, ‘despite the recent media attention on Generation Rent, our research shows that the majority of tenants are actively saving for a deposit and are looking to buy a property in the next five years.’[1]

‘Savvy tenants recognise that they may have to look further afield for properties they can afford. Many are prepared to move to areas that are some distance from their friends and families,’ Morris continued.[1]

Morris went on to point out, ‘the latest stats how that a growing number of young people are renting for longer. According to PwC, almost 60% of 20-39 year-olds in England will rent their homes by 2025, while just 26% will have got on the housing ladder. This younger age group will find it increasingly difficult to buy and are likely to be older than previous generations, before they can afford their own home.’[1]

Concluding, Morris said, ‘what is clear is that the majority of tenants still aspire to purchasing a property. But many tenants recognise that they will have to make sacrifices and compromise, so they can afford to buy a home of their own.’[1]

[1] http://www.propertyreporter.co.uk/landlords/majority-of-tenants-saving-for-first-home.html

Tenant evictions reach highest ever level in 2015

Published On: February 12, 2016 at 9:00 am

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An extremely alarming new survey shows that more than 250 tenants were evicted from their rental accommodation in England and Wales during 2015.

Latest Ministry of Justice figures reveal that 42,728 households in rented property were evicted by bailiffs last year. This was the highest number since records began in 2000.

Housing activists point to welfare cuts and the lack of affordable homes for the 2% increase in repossessions in 2015. Over half of these evictions are said to have been by private landlords.

Evictions

Despite the yearly rise, the data also shows that the number of rental properties repossessed actually fell in the final quarter of 2015. 9,775 households lost their home in the three months to December, in comparison to 11,269 in the previous quarter.

In addition, the figures show that the number of evictions rose by 53% in the five years from 2010.

19,093 evictions in England were by social landlords, with 5,919 made by private landlords. A further 16,440 were carried out through the accelerated procedure, which can be utlised by both private and social landlords to evict tenants on assured shorthold tenancies.

Tenant evictions reach highest ever level in 2015

Tenant evictions reach highest ever level in 2015

Repossessions

The borough of Newham in London had the largest rate of repossessions, equivalent to 191 per 100,000 in the region. What’s more, Londoners were most likely to lose their homes, with 16 out of the 20 boroughs with the largest proportion of landlord repossessions located in the capital.

However, the number of repossession claims fell during 2015, to 148,043. Of these, 90,317 were made by social landlords, 20,063 by private landlords and 37,663 were accelerated claims.

‘Today’s figures are clear proof of the devastating impact that welfare cuts and the chronic shortage of affordable homes are having on hundreds of renters every day,’ commented Campbell Robb, chief executive of the housing charity Shelter.[1]

‘Successive Governments have failed to build enough genuinely affordable homes and short-sighted welfare cuts are only making things tougher. The only way to fix this crisis for good is for the Government to commit to building homes that people on ordinary incomes can actually afford to rent or buy,’ Robb added.[1]

Falls

Different figures from the Council of Mortgage Lenders show that repossessions of mortgaged homes were down by nearly half in 2015, to the lowest levels since 2002.

10,200 homes were repossessed during 2015, of which 3,000 were buy-to-let homes. These properties were twice as likely to be repossessed by lenders in the final quarter of the year, at a rate of one repossession per 2,500 mortgages. This was in comparison to one in 5,000 in the homeowners market.

A CML spokesman said that when a homeowner fell into mortgage arrears, the lender would look at a number of options to try and keep the occupant in their home. He said that seeking a repossession, ‘will be the last option,’ for the lender.

Continuing, the lender said, ‘a buy-to-let is taken out by a landlord to invest in property and so is fundamentally different. The borrowers may not have the same range of options. For example, many landlords only borrow on an interest-only basis at the outset, so switching them to cheaper repayments may not be an option.’[1]

‘Lenders must also consider the position of tenants, who may be paying rent to a landlord who is not paying the mortgage. In this case, an option may be to appoint a receiver of rent to fulfil the role of the landlord and ensure that tenants can remain in the property as long as they continue to pay the rent,’ the spokesman concluded.[1]

[1] http://www.theguardian.com/money/2016/feb/11/tenant-evictions-highest-level-england-wales-ministry-of-justice?CMP=share_btn_tw

Chancellor’s measures to harm sector, report shows

Published On: February 11, 2016 at 11:42 am

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A new survey has revealed that the Chancellor’s policies intended to slow buy-to-let growth are actually leading to increased pressure on the sector.

Research carried out by Belvoir shows that despite 68% of landlords surveyed not raising their rents during the last year, 86% think that larger purchasing costs for investment properties will leave them with no choice but to put rents up in 2016.

Analysis

Managing Director of Belvoir, Dorian Gonsalves, explained, ‘the survey ran from mid December 2015 to mid-January 2016 and we invited all landlords, not just those who are clients of Belvoir, to respond to an on-line questionnaire. We received a total of 1,038 answers and many of these concurred with Belvoir’s predictions at the start of this year.’[1]

The vast majority of respondents were investment landlords with between one and ten properties. 93% of these rental properties were in England.

‘When we asked landlords how changes to stamp duty and taxation were likely to influence their investment plans for the next 12 months, 44% responded by saying they will be adopting a cautious approach to further investment,’ Gonsalves continued.[1]

‘A total of 68% of landlords had not increased their rents at all in the last 12 months and almost half of those surveyed have no plans to increase rents in the next 12 months.’[1]

Chancellor's measures to harm buy-to-let sector, report shows

Chancellor’s measures to harm buy-to-let sector, report shows

Ominous

More ominously, 88% of landlords feel that higher purchasing costs for their investment properties as a result of the tax changes will lead to increased rental costs.

‘Landlords are almost equally divided in their views as to whether they think BTL remains a good investment for new people coming into the market. A total of 46% thought it would still be a good investment and 40% thought it would not, with 14% undecided,’ Gonsalves explained.[1]

‘The majority of landlords named George Osborne’s anti-landlord policies as the single largest challenge that landlords will face in 2016. This is entirely in line with my prediction that increased Government interference in the BTL market will put a real squeeze on the supply of property in the rental market in 2016 and beyond,’ he concluded.[1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/2/letting-agencys-survey-shows-osborne-measures-hurting-private-rental-sector