Tag Archives: Private Rented Sector

SEAL – South East Alliance of Landlords Landlord News, Latest Articles

SEAL - South East Alliance of Landlords

Members of the South East Alliance of Landlords (SEAL) are putting together a bedsit task force to go Street to Street in Southend in a war on neighbours from hell.

Judith Codarin, secretary of SEAL said: “We will choose sections of streets that are troublesome. We will find anyone who lives there and listen to issues. We will try to find landlords who aren’t members, talk to them and try to get them to join.”

SEAL was formed to coordinate a response to Southend-on-Sea Borough Council’s plans to introduce Selective Licensing. It represents owners of almost 6,200 properties with hopes to represent 95 per cent of the local rental sector within three years.

SEAL – South East Alliance of Landlords

SEAL members can be easily identified by a sticker in a front window of their properties.

All but one of the 65 complaints received to date, varying from maintenance issues to more complex Freehold problems, have been resolved by SEAL, the last received to be dealt with within the next few days.

Self-regulation in this way is hoped to free up Southend Council to concentrate on non-members, but with only four Council officers to police over 6,000 other rental properties tenants home-owners are still suffering from a few bad landlords and nightmare neighbours.

Chairman Martin Ransom hopes to set up a new arm capable of helping landlords bring low-quality housing up to standard and said: “We have brought in a new member of the board with experience in this area. He has worked with a specific landlord, with whom the council has had historical issues. He has worked with him to get him up to standard.”

As quoted on their own website “By becoming a member of SEAL, you are demonstrating that you are willing to agree to a higher standard of management. It is vital that SEAL membership is widespread throughout the Borough of Southend as the larger our membership base, the more we can demonstrate to the Council our effectiveness. It is important also that membership continues to grow, as if SEAL fails, the Council retains the power to reconsider Selective Licensing.”

Mark Alexander, founder of Property118 and The GOOD Landlords Campaign commented “it is refreshing to see this kind of initiative and especially one so well supported. We have a long held opinion that Selective Licensing is not the answer to anti-social behavioural problems or criminal elements operating in the Private Rented Sector. We hope the group will take a look at the enforcement model being adopted by Lewisham Council and learn from that. The SEAL initiative could prove to be a superb method of routing out and reporting the worst offenders. Sadly a handful of criminals can spoil the reputation of an entire sector. Enforcement is required, NOT a stealth tax on good landlords which is ignored by the true villains.”


A well considered BuytoLet strategy is essential Buy to Let News, Landlord News, Latest Articles

Provision for regular investment into rental properties needs a well considered BuytoLet strategy.

A sensible Rainy Day fund is essential and prudent investors will factor this in when purchasing their rental investment and adopt an on-going approach to property upgrades.

This is very much in keeping with Mark’s advise in the Basic fundamentals of a buy to let property investment strategy.

Standards in the BuytoLet market have improved and tenants are less willing to accept sub standard and unloved properties paying a higher rent for well presented and well located properties. Specification of the property is important and landlords need to consider regular upgrade and maintenance works at the very least between tenancies and every three years.

Zoe Rose, head of lettings for Strutt & Parker said “if you regularly maintain your rental property on an annual basis, even when your tenant is situ, then overall you are likely to spend less than a major upgrade every three to five years. You are also sending a clear message to your tenant that you are a conscientious landlord that cares about them and the property. They in return are likely to look after your investment and appreciate their surroundings and do their very best to keep your property in immaculate order.”

“We do have a few clients that have enjoyed healthy rent increases over three to five years linked to RPI without doing much to their property during the tenancy. When the property comes back to market, they are shocked to learn that they need to spend significant funds in order to support the same level of rent achieved before.”

“Like any investment the return can go up or down and you wouldn’t run any other assets dry and expect to maintain the same level of return. It is the same with rental property. You need to keep aside sufficient funds to upgrade and reinvest in order to optimise the returns.”

Stephanie McMahon said “the increase in the Private Rented Sector across London with 79% more household renting in 2011 than 2001, shows just how large the market is. In these types of conditions investors must put back more to reap the financial benefits. Tenants are looking for longer leases too, with 17% increase in those taking longer leases in the third quarter of 2013. Therefore landlords need to invest more to fight for those tenants.”

“It is much better to plan properly than be stung with an extended void period or accepting a very low rent just to secure a tenant. Having a well thought out maintenance and upgrade plan really does pay dividends in the end.”

Landlords CalculatorThe Landlords Calculator designed for Property118 readers is very easy to use and can help you with your own BuytoLet strategy. You don’t need to download any extra software whatsoever. It allows you to analyse returns and other important numbers relating to any residential investment property deal with ease.

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Rise in working families claiming benefits for housing Latest Articles, UK Property Forum for Buy to Let Landlords

As early as Christmas working households claiming support for private sector rent could outnumber those in which nobody works, says a new report published tomorrow (Friday 18 October) by London Councils.

‘Tracking Welfare Reform in London’ reveals that just under 50 per cent of households receiving benefit in private rented housing in the capital have at least one person in work. Rise in working families claiming benefits for housing

If the number rises as expected London will be the only part of Britain where working households claiming benefits for private rented housing eclipse those where no-one is working. The report also found the number of people receiving help with their rent has fallen in inner London since May 2011, while in outer boroughs the number has increased.

Chair of London Councils, Mayor Jules Pipe, said: “Last year, private sector rents in inner London rose by 14 per cent, so it’s not surprising that more and more working families are turning to housing benefit to help them survive. Our latest research shows households claiming housing benefit, both working and non-working, are increasing in outer London and that is placing a greater burden on local services such as schools, transport, and social care.

“London Councils supports a fairer, more accountable system of welfare, but is concerned that the current reforms have the potential to be devastating for families and local services. We want the government to undertake a serious, full and fair assessment of the additional costs of welfare reform for London’s councils as soon as possible.”

London Councils, which represents the capital’s 32 boroughs and the City of London, is calling for London to be exempt from the below inflation rise in private sector housing benefit, known as Local Housing Allowance (LHA). It is concerned that the move, which will see LHA rates limited to one per cent growth for the next two years, could drive homelessness.

The report also found:

  • a 17 per cent rise in people claiming LHA since April 2011, with working households accounting for 96 per cent of that growth
  • the number of working households claiming LHA has doubled over four years, while the number of non-working households claiming LHA has increased by 10 per cent over the same period
  • the number of households on LHA fell in some inner London boroughs by as much as 30 per cent between May 2012 and May 2013, but grew by 10,000 in outer London, which equates to an overall rise of 7 per cent
  • a rise in the number of households accepted as homeless and in priority need in London since 2010. Around 41,000 households are now in temporary accommodation in London, having presented to their local authority as in urgent housing need
  • around 97 per cent of households affected by the benefit cap in the four pilot London boroughs contained children.

Why Aren’t We More Worried About Withdrawal of Benefits? Latest Articles, NLA - National Landlords Association

I am interested that I can’t see any response to, or comment about, George Osborne’s announcement last week to withdraw benefits to claimants – first for 1 month, then for 3 months. Am I the only landlord with social tenants?!

There are serious implications.

Here is an extract of a letter I am sending to Right Hon GO, and to Kris Hopkins, the NLA and any one else who will listen. If you have social tenants I’d urge you to do the same.

As a landlord in the private rented sector I house many tenants who are on benefits.
I know from experience that when a tenant’s benefits are withdrawn, all benefits are withdrawn, including housing benefit/local housing allowance.

In my experience this is always without notice to the landlord. The first that they will know is when the tenant does not pay their rent, or if they are on direct payment, when direct payment does not arrive.

However, I am sure that you will appreciate that in the meantime the mortgage and other bills still have to be paid by the landlord.

My concern is this.

Unless an element of the benefits is ring-fenced to pay the equivalent of housing benefit or local housing allowance, landlords such as myself, who house social tenants on benefits, could see rent payments not being made when benefits are withdrawn.

Under the current legal system there is a defined process by which landlords have to operate in order to gain possession of the property. In practice this can take anywhere months and, in exceptional circumstances, up to a year when a tenant does not comply with court orders and a bailiff needs to be appointed.

It is therefore entirely conceivable that if benefits are withdrawn from a claimant that the landlord will be left with a property with a non-paying tenant.

I would also like to point out that even if an element of the benefit were ring fenced to provide for rent, this would have to be paid directly to the landlord, otherwise I have no doubt that many tenants would use the money in lieu of job seekers allowance or whichever benefit has been withdrawn.

I would therefore urge yourself and Mr Hopkins to consider one or more of the following:

• In the event that benefits are withdrawn, either for one month, three months, or even longer, that an element of that benefit is ring fenced and paid direct to the landlord so that the tenant’s rent is covered.
• That legislation be passed to allow landlords to obtain fast track possession of the property where a tenant is has benefits withdrawn.
• That legislation be passed whereby mortgage lenders be required to waive mortgage payments where a tenant has benefits withdrawn and cannot, or will not, pay their rent.

Again I would urge you to consider these, as sadly, from experience, I know, and I am sure that many other landlords who house social tenants will agree, that the ‘punishment’ for not complying with the terms of claiming benefits will not fall upon the claimant, but will fall upon the landlord.

I would also urge the government, and particularly Mr Hopkins, to decide once and for all how you perceive the private rented sector, specifically in terms of housing social tenants through private landlords.

It seems to me that there is a lack of understanding within government as to the pressures and problems that private landlords face in housing tenants on benefits.

In this age of austerity where few council houses are being built, and the responsibility for housing social tenants’ falls mainly upon private landlords, it would be nice to think that the government support our efforts. Sadly, however, that does not seem to be the case as ideas are put forward, and legislation passed, which does little to help and much to hinder.

If it is still the intention of the government that social tenants are housed primarily by the private rented sector then can I humbly suggest that greater consultation is made with those at the sharp end who house social tenants, and that the ideas and legislation put forward encourage private landlords and not discourage.

Regards

Petergeorge osbourne


Council of Letting Agents call for Scotland’s dangerous electrics to be outlawed Landlord News, Latest Articles, Lettings & Management

The Council of Letting Agents has today called for better electrical safety standards in Scotland’s privately rented properties.

Speaking at their inaugural conference, Council of Letting Agents (CLA) Convenor Kathleen Gell said: “Scotland depends upon the properties that our letting agents manage. People rely on these properties for their homes and they need to be safe. We have national standards and regulation for gas safety, but the same is not in place for electrics and that needs to change.”

“The only way we can guarantee to keep properties and tenants safe is to regulate electrical safety to a national standard and publicise this as well as gas safety.

Research reveals that there are on average 70 deaths a year in the UK from electrical fires and that Scottish homes are at a disproportionately high risk from these. It has also been shown that tenants of private landlords are more likely to be at risk of electric shock than home owners.

The private rented sector is growing – the number of dwellings provided by private landlords has risen from 115,000 in (5% of all homes) in 1999, to 267,000 (11% of all homes) in 2011 and all indications point to that trend continuing.”

Kathleen Gell continued: “There have been great improvements in this sector with compulsory registration for landlords and the introduction of the tenancy deposit scheme, but we will fall behind on basic safety if we do not act in this area too.”

“We want there to be compulsory checks on wiring and appliances in rental properties. There are standards we could use (Electrical Installation Condition Report (EICR) and Portable Appliance Testing (PAT) ), but we need some teeth to enforce them – we cannot afford any grey areas.”

“Many letting agents already require this level of safety check, but it cannot be enforced: there is no national standard to adhere to and landlords wishing to avoid the cost of a safety check, simply go elsewhere to lease their property.”

“The private rented sector is a major part of the housing landscape in Scotland. We have a duty of care to the people who depend on it for their homes and we need to make sure it is safe.”

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Enforcement not legislation – PRS Hit Squads Latest Articles, UK Property Forum for Buy to Let Landlords

There is already more than enough funding and legislation to police the Private Rented Sector.

The last thing we need is more legislation, what everybody wants is enforcement and word on the street is that we could begin to see it before the end of 2013. Ben-Reeve-Lewis

PRS Hit Squads

The authorities all know who the real criminals are and the only reason the criminals are still in business is because those holding power don’t combine resources, in fact they rarely talk to each other. Until now they have all run scared of “data sharing protocols” but when that’s put to one side expect to see some very big cases of criminal landlords being taken to task.

I have heard that PRS Hit Squads will target known criminal landlords between now and Christmas and are supported “in principle” by the likes of Mark Prisk, Boris Johnson and others who openly admit to not being fans of the licensing model being operated in Newham. I’ve also heard that six figure funding for a trial has been agreed at ministerial level.

These “PRS Hit Squads” as I’ve labelled them will comprise of:-

  • Environmental heath
  • HMO licensing
  • Planning
  • Anti social behaviour teams
  • EDF revenue
  • Building contol
  • UKBA
  • Police

The plan is that they will share intelligence and converge on criminal landlords in a military style operation, focussing on the worst operators first of course. With their combined resources the criminals will not stand a chance. It will be like a man with a pea shooter trying to fend off the SAS 🙂

Beware the Spin Doctors!

My hope is that the PR outcome of the PRS Hit Squad successes will be positive and support the need for the model to be extended nationally. It is a very low cost model and the results should save the tax payer money as well as improving peoples lives (unless you are one of the targeted criminals of course!). The last thing the PRS needs is for the successes to be used as justification for more regulation. The spin doctors will see this as an opportunity to justify schemes such as Newham but this must not be allowed to happen.

Landlords can be victims too

Landlords are also the victims of criminals and I have seen some very sad examples of that. A recent case in the Fens involved a landlord who let his former home to a Gang-master. Unbeknown to him the unregulated Gang-master then allowed 20 immigrant farm workers to live in the property, all sleeping on mattresses on the floor. When the landlord found out he obviously wanted them out ASAP, as did the neighbours of pretty culdesac in which the landlords 4 bad detached property was located but the law stood in the way. Had the landlord been able to go to the authorities, secure in the knowledge they would fight for him, it would have been a Godsend to him. Instead, the authorities are threatening the landlord and not the Gangmaster! Clearly common sense isn’t that common.

Let’s hope the PRS Hit Squads are successful in taking down criminals and then lend a much needed helping hand to landlords who are also targeted by criminals. If common sense prevails we might just see more action and less talk. When all is said and done, more is said than done, but fingers crossed let’s hope that not the case here.

The Highland Fling

Earlier this year the Scottish Association of Landlords reported that landlord registration in Scotland has cost landlords £11.2 million in fees while the start-up Scottish Government grant for the scheme was £5.2 million. According to the results, since 2006 there have only been 40 rogue landlords identified as operating in Scotland, that’s the number of rejected applications. The cost equates to £400,000 per rogue identified!

Summary

The schemes in Newham and its copycats also show signs of being similar “White Elephants”, therefore I’m pinning my hopes on the PRS Hit Squads taking down as many criminals as possible, proving once and for all that it’s more enforcement not legislation we need. Enforcement not legislation - PRS Hit Squads


Tenants Charter – Mr Pickles, have you gone completely mad? Buy to Let News, Landlord News, Latest Articles, Legal, Property Investment News, Property Market News, Property News, Tenant Eviction, UK Property Forum for Buy to Let Landlords

Tenants Charter

Open Letter to Mr Eric Pickles – Communities Secretary – re Tenants Charter

Dear Mr Pickles

Have you gone completely mad?

I am reading in The Times Newspaper today that you are to announce a “Tenants Charter” which will allow tenants to demand two to five year tenancy agreements.

Do you realise that most buy to let mortgage borrowers would be in default of their mortgage contracts if they were to offer tenancy agreements with fixed terms longer than 6 or 12 months?

Do you realise that most modern leases (e.g leasehold flats) contain conditions on subletting not exceeding 12 months in term?

There is a very good reason why mortgage lenders have these conditions in their mortgages. It is because it is so difficult to obtain possession when a tenant reneges on a contract. Bad payers are regularly getting away with up to 5 months of rent free living. Theoretically a landlord can apply to obtain possession by serving two weeks notice once a tenant is two or months in arrears on rent. However, after that 10 weeks has expired it can take several months to get a Court date. Even when a possession order has been granted it then takes several more weeks before bailiffs can be appointed to enforce the order. If you want landlords and mortgage lenders to provide greater security of tenure to tenants then you are going to have to sort out the possession rules for landlords first.

Section 21 of the housing act transformed the UK Private Rented Sector which was in rapid decline until the 1988 act was introduced. Forcing landlords to offer long term tenancy agreements will force the PRS back into the dark ages and reduce incentive for further investment into the sector.

Does Government not recognise the need for a healthy PRS?

Does government not realise that a huge sector of the working population rely on the housing flexibility the PRS provides in terms of job mobility?

Do you have any idea of how your speech today could destabilise the Private Rented Sector?

I totally understand that good tenants, particularly young families with children of school age, need a fair deal and it cuts both ways in that most landlords want good tenants to stay long term. It makes economic sense for landlords to have quality long term tenants,

So why have you not even considered promoting the Deed of Assurance?

Perhaps you are unaware of the effectiveness and simplicity?

A Deed of Assurance is a document in which a landlord promises to pay an agreed level of compensation to a tenant if possession is obtained within a given time period. 

A Deed of Assurance is a relatively simple legal agreement which sits alongside an Assured Shorthold Tenancy Agreement “AST”. It is a separate agreement between landlord and tenant which does not affect the landlords rights to serve notice or to obtain possession, therefore it does not affect the rights of a mortgage lender either. However, it does offer tenants peace of mind.

From a tenants point of view, a Deed of Assurance provides far more flexibility than a long term tenancy because they are only tied in for 6 months and can then move on if they need to. What a Deed of Assurance offers in addition to an AST is peace of mind.

The compensation amount offered by the landlord is negotiable but obviously the idea is to agree something which is meaningful to both parties. For example, I offer to pay anything between £1,000 and £5,000 compensation if I obtain possession within the agreed period, providing the tenancy conditions have been observed impeccably by the tenant of course. If tenants fail to pay rent on time or breaches other contractual terms within the tenancy agreement their right to claim compensation for being evicted during the Deed of Assurance is forfeited. I have been offering a Deed of Assurance to my tenants for a few years now and I am delighted to report that my relationships with new tenants have never been better.

I do not expect a reply from you Mr Pickles but I do hope you will consider the implications of acting on the advice of the people who have been influencing you up to this point.

Yours sincerely

 

Mark Alexander


Ed Miliband housebuilder land grab would face legal challenges Latest Articles, Property News

In Ed Miliband’s speech at the Labour Party conference he warned “We’ll say to private developers, you can’t just sit on land and refuse to build. We’ll give them a very clear message – either use the land or lose the land. That is what the next Labour government will do.”

‘We’ll say to local authorities that they have a right to grow and neighbouring authorities can’t just stop them, we’ll identify new towns and garden cities, and we’ll have a clear aim that by the end of the parliament Britain will be building 200,000 homes a year more than at any time for a generation.”

However allowing local authorities to take back land from housebuilders would fail and would not deliver any new homes, warns property and planning law firm Winckworth Sherwood.

Karen Cooksley, a partner at Winckworth Sherwood said: “Successive governments have tried and failed to force the public sector to release land for housing. Forcibly taking land off house builders into the public sector will undoubtedly face legal challenges.

“Ed Miliband would be far better focusing his attention on making local authorities and other public sector organisations release land they hold for new homes as government has more direct control over them. He could start by making sure central government departments are first in line.”

Karen adds: “Home ownership is also not the only solution to solving our housing need. There is a real need to increase the size of the private rented sector in the UK on an enormous scale as not everyone wants or can afford to own a home. There is an appetite from new and institutional investors.ed miliband


Reluctant landlords begin slow exit from private rented sector Latest Articles, Letting, Lettings & Management, UK Property Forum for Buy to Let Landlords

Latest ARLA research also shows regional variation in tenant demand.

The number of reluctant landlords in the private rented sector (PRS) is falling*, according to research from the Association of Residential Letting Agents (ARLA).

Over the past three months, ARLA member offices have reported a decrease from 26% to 21% in the proportion of rental property coming onto the market because it cannot be sold. This also represents a sharp drop of 21% on the figure of 42% recorded last year.

As these reluctant landlords stop entering the sector, tenants are still faced with strong competition for rental homes. 52% of ARLA members said there were more tenants than properties available. While this represents an incremental fall on tenant-property ratio from the 54% recorded in the previous quarter, this statistic shows that PRS accommodation remains in high demand.

The South East (excluding London) has the highest proportion of members reporting more tenants than properties (67%), whereas London, surprisingly, has the lowest, with just 17% experiencing this trend.

Despite this competition among tenants for properties, there has been an overall fall in the number struggling to meet rental payments. The current figure of 35% remains high, but represents a fall of 5% from the figure of 40% recorded at the same time in 2012.

Ian Potter of ARLAIan Potter, Managing Director, ARLA, said: “Much has been written recently about the recovery of the residential sales market, and it would appear that these effects are now being felt in the private rented sector. While the departure of ‘accidental landlords’ from the sector will be a good thing for the individuals concerned, there is a real and ongoing worry about the level of rental properly supply across the country.

“With competition for the best properties remaining fierce, landlords and tenants alike can benefit hugely from seeking the advice of an ARLA agent. All ARLA licensed agents must adhere to a strict code of conduct, as well as offering client money protection and redress schemes, which protect all parties if things go wrong.”  

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