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Tag Archives: PRS

Housing Minister moves on after 104 days in the job Latest Articles, Property News

Prime Minister Rishi Sunak’s cabinet reshuffle this week has seen the housing minister Lucy Frazer being promoted to culture secretary after just 104 days in the role – but she still managed to rack up one of the longest stints in the job.

She has been replaced in the housing hot seat at the Department for Levelling Up, Housing and Communities by little-known Rachel Maclean.

The new minister tweeted: “Delighted to be appointed as Minister in @luhc. Looking forward to a new challenge, tackling one of the defining issues the government faces. I start now!”

14th housing minister in 10 years

Ms Maclean is the sixth housing minister in 12 months, and the 14th over the last 10 years in the post.

There have now been 17 housing ministers since the Conservative Party took power in 2010.

The promotion of Ms Frazer has been described by the British Property Federation as ‘hugely frustrating’.

And one comedian quipped that someone has more chance of becoming the government’s housing minister than they have of buying a home.

Replaced Lee Rowley last October

Ms Frazer replaced Lee Rowley last October and he’d only been in charge since 7 September – to notch up 48 days.

Before him, Marcus Jones lasted 63 days as the housing minister after taking on the job from Stuart Andrew who held a brief from February 2022.

Before Mr Andrew, Chris Pincher held the post for an incredible two-year stint.

Melanie Leech, the chief executive of the British Property Federation, said that the minister’s departure creates a barrier when it comes to progressing promised reforms, such as the Fairer Private Rented Sector which was first discussed in 2019.

Previously at the Ministry of Justice

The new housing minister was elected a Conservative MP for Redditch in 2017 and was previously Minister of State at the Ministry of Justice between 7 September and 28 October 2022.

Before that role, Ms Maclean was Parliamentary Under Secretary of State at the Home Office between 17 September 2021 and 6 July 2022, and Parliamentary Under Secretary of State at the Department for Transport between 14 February 2020 and 16 September 2021.

Landlords call for PRS tax review to solve rental crisis Landlord News, Landlord Tax Planning, Latest Articles, Property Investment News

In a bid to show how serious the current rental housing crisis is, landlords are calling on the government to carry out a review on how the sector is taxed.

The call has been made by the National Residential Landlords Association (NRLA) after a survey revealed that 65% of landlords say that tenant demand for housing in the private rented sector (PRS) had increased in the last quarter of 2022 in England and Wales.

That’s up from the 56% of respondents who reported an increase in demand during the last quarter of 2021.

But, despite strong demand from renters, 30% of landlords say they planning to cut the number of properties they rent out this year.

And if this happens, that would be the highest level of planned disinvestment seen in more than six years, the NRLA says.

‘Impact of the supply crisis in the rental market’

Ben Beadle, the NRLA’s chief executive, said: “From students queuing to view properties, through to benefit claimants who struggle to access homes they can afford, the impact of the supply crisis in the rental market is stark.

“The harsh truth is that the government’s efforts to discourage investment in the sector are working.

“But punitive taxation alongside record demand for rented housing is a disastrous combination that serves only to hurt renters.”

‘Supply crisis we see is entirely Government made’

He added: “The supply crisis we see is entirely Government made and the policies of successive Chancellors have backfired spectacularly – it is time to change tack.

“The Treasury needs to undertake a comprehensive review of the taxation of the rental market.

“This needs to assess the impact recent tax hikes, including changes to Mortgage Interest Relief and Stamp Duty, are having on supply. We then need pro-growth measures to support renters to access the homes they need.

“We encourage all of those with an interest in housing supply to contact their MP in support of our call, making use of the NRLA’s toolkit to help.”

Crisis facing renters in need of accommodation

The NRLA says that the crisis facing renters in need of accommodation follows tax changes aimed at dampening investment in the sector. This has included:

  • Restricting mortgage interest relief
  • A 3% stamp duty levy on the purchase of homes to rent out
  • An effective hike in Capital Gains Tax in last year’s Autumn Statement.

In its submission to the Treasury prior to next month’s Budget, the NRLA is calling for a full review of taxes which impact the sector.

As part of this call to action, the NRLA encourages the Treasury to analyse the combined impact of all recent tax changes on the supply of homes to rent.

Landlord petition is still picking up votes

Meanwhile, a petition launched by Midlands’ landlord Simon Foster to reinstate tax relief allowing mortgage interest to be set against rental income is still picking up support.

The petition now has 32,833 signatures – even though the government has already replied saying that it believes the current tax regime is fair.

Should the petition, which is attracting lots of support from prominent people and organisations in the PRS, reach 100,000 signatures, it could be debated in Parliament.

England’s PRS rockets in value to hit £1.5trn Buy to Let News, Latest Articles, Property News

The private rental sector (PRS) in England has rocketed in value by 30% since 2019 to be worth £1.5trn, research reveals.

The findings from debt advisory specialists Sirius Property Finance looked at the level of stock and its current market value, along with the average yield available before the Covid pandemic hit.

And, despite the government’s best efforts, the data shows that the PRS has grown by 2.4% across England since 2019, with 4.876m properties housing the nation’s tenants.

The growth has been driven by rented homes in the South East with a 9.1% increase, the South West (+7.4%) and the North West (+3.8%).

However, the East Midlands (-9.9%), Yorkshire and the Humber (-0.4%) and East of England (-0.3%) have all seen a decline in PRS stock when compared to the pre-pandemic market.

‘The private rental sector has continued to grow’

Nicholas Christofi, the managing director of Sirius Property Finance, said: “Despite the government’s sustained attempts to dampen the enthusiasm of buy-to-let investors, the private rental sector has continued to grow in size over the last few years.

“This growth, combined with the high rates of house price appreciation seen throughout the pandemic, have pushed the total value of the sector to a quite remarkable level.”

He added: “However, previous whisperings of a hike in capital gains tax will remain a worry for those who have benefited from an increase in the value of their buy-to-let portfolio.

“Should these changes come to fruition in the future, we may well see many landlords scramble for the exit to avoid the government’s latest cash grab.”

PRS has a current value of £1.536 trillion across England

The analysis shows that the PRS has a current value of £1.536 trillion across England and London is home to the most valuable part of the PRS with a valuation of £575.7bn.

However, when compared to the pre-pandemic market, the capital has seen the smallest increase in this total value at 16%.

The South West has driven PRS market performance in terms of the increase in total value, up 41% when compared to 2019.

The total value of PRS stock has also increased by more than 30% across the North West (+39%), South East (+37%) and West Midlands (+31%).

The analysis also shows that of the 4.876m rental homes across England, just 130,272 are currently listed online as available to rent, equating to just 2.7% of all PRS stock.

This, the firm says, highlights the pivotal role the sector plays in housing people today.

PRS is vital for the economy – report Buy to Let News, Landlord News, Latest Articles

The private rented sector (PRS) plays a crucial social and economic role in the country, a report reveals.

According to a survey carried out by the National Residential Landlords Association (NRLA), most tenants in the PRS have had a positive experience of renting.

And, the report adds, it would be wrong to claim that private renters are ‘trapped’.

The NRLA found that 41% of tenants rated their rent affordability as ‘excellent’ or ‘good’, with 38% rating it as ‘fair’.

‘Positive and vital role the rental market has to play’

The NRLA’s chief executive, Ben Beadle, said: “Today’s report makes clear the positive and vital role the rental market has to play in the economic and social life of the country.

“Contrary to the rhetoric from many, for the vast majority of tenants their experience in rented housing is positive.”

He added: “This is the platform the government needs build upon to ensure a sector that works for renters and responsible landlords.”

Survey questioned 2,000 private renters

The survey questioned 2,000 private renters in England and Wales and found fewer than one in 10 of them want to switch to social rented housing.

Job security is also the biggest factor when people choose to buy a home with 37% of renters being more likely to buy their first home if they have a stable job.

This figure rises to 50% among renters aged 18–34.

The report also found that older people are becoming more reliant on the PRS with 48% of tenants over 55 saying they wanted to stay in the sector.

Helping more than 3 million over 65s who want to downsize

The PRS can also play an important part in helping more than 3 million over 65s who want to downsize, the report finds.

According to government data, 53% of owner-occupied properties are under-occupied, compared with just 15% in the PRS.

The report’s writer, Chris Walker, a director at ChamberlainWalker Economics, said: “For many, the PRS acts as an entry point to the housing market, helping younger people gain their footing and independence when they leave the parental home without the bigger jump and commitment of homeownership.

“The PRS is a mainstay housing option for many younger people whilst at university and for many as they move away from where they grew up to enter the world of work for the first time.”

Rented home supply drops sharply as landlords flee the PRS Buy to Let News, Landlord News, Latest Articles, Property Investment News, Property Market News, Property News

There has been a ‘significant’ drop in the supply of rental accommodation as landlords have sold up because of increasing regulation, research reveals.

According to TwentyEA, the supply of homes to rent fell by 8% year on year in 2022 and by 25% since 2019.

The findings also highlight that tenant demand for rental homes is also falling, but less than supply.

However, underlying tenant demand is still strong with demand volumes last year falling by 4% on 2021 and by 17% on 2019.

This means, the UK’s largest homemover database reveals, that rent prices are increasing because of renter demand for fewer available homes.

The firm says that rents have risen by an average of 22% since 2019.

Landlords leaving the private rented sector

And with landlords leaving the private rented sector, the volume of lettings stock has been falling since March 2021.

In December 2022, there were only 199,725 properties for rent available – that’s in stark contrast with December 2019, when there were 328,412 homes.

Stuart Ducker, the strategic solutions director of TwentyEA, said: “There is simply too much demand and not enough supply.

“Average agreed let prices have continued to rise in the medium term with prices up by 8.5% over the last year and 22% up since 2019.

“If Government legislation on the private rental sector continues, and it looks like it will, expect prices to rise further if incomes rise.”

Available lettings stock has dropped by 39% in just three years

Mr Ducker also points out that available lettings stock has dropped by 39% in just three years and that increasing regulation in the PRS is leading to many landlords to divest.

He adds: “This supply side, pitched against underlying demand for rental properties has created a perfect storm.

“Whilst TwentyCi does not issue forecasts to the market, our view is that new lettings instructions will fall by a further 5% on 2022 to 1,121,000.

“While this is not good news for tenants, it’s great for agents and landlords who will continue to see their rents rising in real terms after years of decline.”

Poor areas drive PRS growth – with record rent paid in 2022 Buy to Let News, Landlord News, Latest Articles, Lettings & Management, Property Investment News, Property Market News, Property News

An analysis of the latest census data shows that between 2011 and 2021 the number of households renting privately increased by 151,800 in the 10% most deprived areas of England and Wales, compared to an 80,100 rise in the 10% least deprived areas.

The findings from Hamptons reveal that 23% of households in the poorest 10% of the country rent privately, up from 18% a decade ago – and well above the 13% that rent in the most affluent areas.

The firm’s rental data shows that the total amount of rent paid by the 10% of most deprived areas has more than doubled in a decade, rising 102% from £2.7bn in 2012 to £5.4bn in 2022.

Across the whole of England and Wales, tenants spent a total of £71.5bn on rent in 2022 – a record figure.

And 54% of the decade’s growth came from rising rents, while 46% came from the increase in privately rented households.

‘Growth in the private rented sector ‘

Aneisha Beveridge, the head of research at Hamptons, said: “Growth in the private rented sector over the last decade has come on the back of fewer younger people buying their own home, particularly in the less affluent areas.

“2022 has been a record-breaking year for rental growth but, even so, rents have failed to keep pace with wider inflation, and indeed landlords’ rising costs.

“With the cost-of-living crisis hitting tenants particularly hard, rental growth seems to have settled at a new pace, hovering around the 7% mark for the fifth consecutive month.”

She added: “While we may see the rate of growth soften a little more in the coming months, rents are still likely to rise around 5% in 2023 given the lack of homes available to rent and inflationary pressures on landlords.”

The average rent on a newly let home in Great Britain

Hamptons also says that the average rent on a newly let home in Great Britain ended the year at £1,216 in December, 7.7% up on December 2021.

This means that the average tenant moving home will now be paying an extra £1,044 in rent each year.

The good news for tenants is that rental growth has cooled from its summer peak of 11.5% in May 2022, however, it still marked the strongest annual growth recorded in any December since 2013.

Hamptons also says that a lack of supply continues to fuel rents and while stock levels have picked up from rock-bottom this time last year, there were still 41% fewer homes available to rent across Great Britain than in December 2019.

This, coupled with a 6% increase in the number of tenants looking for a new home, has pushed rents up across the country.

Scotland saw the biggest increase in rents of any region

And, for the second consecutive month, Scotland saw the biggest increase in rents of any region in Great Britain, with annual growth of 11.0% on newly let properties.

Rental increases on existing tenancies in Scotland have been effectively banned since September, which means that landlords are increasingly relying on the open market to raise rents.

Scotland also saw the biggest decline in the number of homes available to rent.

There were 53% fewer homes available to rent in December 2022 than in December 2019 – but there were 38% more would-be tenants looking for somewhere to rent.

Exodus of private landlords ‘exaggerated’ – claim Buy to Let News, Landlord News, Latest Articles, Lettings & Management, Property Investment News

A survey has revealed that landlord confidence is ‘robust’, though many worry about the government’s meddling in the private rented sector (PRS) and want changes to capital gains tax allowances reversed.

The findings from property lending experts, Octane Capital, also highlight that landlords are concerned about the increasing day to day cost of their buy-to-let investment driven by the cost-of-living crisis.

The survey of 2,000 landlords also found just 8% of investors had reduced the size of their BTL portfolio over the last year.

‘The exodus of landlords from the rental sector’

Jonathan Samuels, the chief executive of Octane Capital, said: “It appears as though the exodus of landlords from the rental sector has been somewhat over exaggerated with just a small proportion opting to reduce the size of their portfolio in 2022.

“That said, while we’ve seen a degree of stability return following a shambolic mini-Budget last September, many buy-to-let investors remain cautious about the year ahead.”

He added: “This caution is likely to prevent them from investing further until a greater degree of certainty returns, although we must also tip our hats to the government in this respect, as their consistent attack on the sector remains the number one concern.”

Capital gains tax allowance changes reversed

Along with 41% of landlords who would like to see capital gains tax allowance changes reversed, 60% don’t believe that interest rate hikes have peaked.

Landlords also don’t believe the market will be more settled during 2023 and most say their biggest concern is the government’s legislative interventions.

Many also worry about the increasing running costs of buy-to-let investment such as energy bills and maintenance.

The day-to-day management also ranked as one of the biggest challenges facing landlords – and the increased cost of borrowing.

Increasing the size of their buy-to-let portfolio

As a result of their concerns, just 16% of landlords intend to increase the size of their buy-to-let portfolio over the coming year.

And when asked which government legislative change they would most like to see reversed, the recent changes to capital gains tax allowance ranked top.

The government plans to reduce the CGT tax-free allowance from £12,300 to £6,000 in April, with a further reduction to just £3,000 by 2024.

The ban on Section 21 evictions and potential improvements to EPC ratings also ranked highly among the changes landlords would most like to see reversed

Landlords warn that energy efficiency plans are ‘dead in the water’ Buy to Let News, EPC, Landlord News, Latest Articles, Lettings & Management, Property News

Landlords are warning that plans to improve the energy efficiency of homes in the private rented sector (PRS) are ‘dead in the water’ because the Government has failed to respond to a consultation on the issue which closed two years ago.

Originally, a target for all new tenancies in the PRS to have an energy performance rating (EPC) of at least a ‘C’ by 2025 was made by the Government.

It was then proposed that the EPC target be extended to cover all tenancies by 2028.

However, the consultation on the issue closed in January 2021 – with the Government not providing any response to it which has led to uncertainty within the PRS about what is expected.

Dates for improving energy efficiencies

Now the National Residential Landlords Association (NRLA) is calling on the Government to make clear that the dates for improving energy efficiencies are now ‘unrealistic’.

The organisation is also urging certainty for the market and wants a definitive timetable for the publication of a consultation response – and any proposed legislation.

Among the Government’s proposals was for all landlords to pay up to £10,000 to carry out the necessary improvements to meet the proposed EPC targets.

‘Want to see properties as energy efficient as possible’

The NRLA’s chief executive, Ben Beadle, said: “We all want to see properties as energy efficient as possible.

“However, the Government’s delay in responding to its consultation on energy standards in the private rented sector means its plans are dead in the water.

“The lack of clarity is playing a major part in holding back investment in the homes to rent tenants desperately need.”

He added: “In the interests of certainty, the Government needs to admit what we all know, namely that it has no hope of meeting its proposed energy targets for the rental market.”

Calling for any proposed cap to be linked to the average market rent

The NRLA is calling for any proposed cap on what landlords will pay to be linked to the average market rent for the area in which the rental property stands.

This move would, the NRLA says, see a landlord’s bill being tapered from £5,000 to £10,000 if rental and property values were considered.

Also, NRLA wants a package of financial measures to support a landlord’s investment, and this would include a new tax allowance for landlords who carry out remedial work towards meeting the Government’s Net Zero target.

‘Misguided assumption that landlords have unlimited sums of money’

Mr Beadle said: “The plans, as they currently stand, rely on a misguided assumption that landlords have unlimited sums of money.

“The proposals fail to accept the realities of different property and rental values across the country, and that the private rented sector contains some of the most difficult to retrofit homes.

“Ministers need a smarter approach with a proper financial package if we want to ensure improvements to the rental housing stock.”

Landlord Accreditation Scheme closing? Buy to Let News, Landlord News, Latest Articles, Lettings & Management, Property Investment News, Property Market News, Property News

Hello, I’m interested in what your opinions are about this. I’ve received an email from my local Accreditation Scheme, advising that the council can’t afford to run it any longer.

A decision is being made on 28th February!

We apparently will get a pro rata refund of the annual fee.

I wonder why it was there in the first place and if the council are struggling, what will be the next financial attack on us be?

Thank you,

M

Half of landlords say PRS is tougher – and 62% will put up rents Buy to Let News, Landlord News, Latest Articles, Property Investment News, Property News

Life as a landlord in 2022 didn’t get any easier and new research reveals that nearly half of landlords say their life is harder than it was a year ago.

The findings from Aldermore also show that nearly two out of three landlords will be putting their rents up this year.

Jon Cooper, the head of mortgages at Aldermore, said: “2022 was marked by troubling developments to the economy and the property market has faced some significant challenges.

“With the cost-of-living crisis already impacting tenants, homeowners and landlords alike, the outlook for next year seems tricky to predict.”

‘Healthy and positive opportunities for landlords’

He added: “However, as our Buy to Let City Tracker has revealed, there remain healthy and positive opportunities for landlords in the UK.

“As we head into 2023, landlords should work closely with their brokers to assess their portfolios and identify opportunities that lie ahead.”

However, the bank’s findings paint a varied picture, with more than half (54%) of landlords still feeling optimistic about the future.

And two thirds (66%) state that being a landlord remains a good way to make money.

Unable to expand their property portfolio

With record levels of inflation, the cost-of-living crisis and housing market volatility, nearly half (48%) of landlords have been unable to expand their property portfolio.

Looking ahead, two out of five (42%) say they will consider downsizing if market conditions continue as they are.

In a bid to maximise returns in the current environment, four out of 10 (42%) say that if they were to expand their portfolio, they would buy property using a limited company.

Have no choice but to put up rents by at least 10%

With an uncertain outlook for landlords, nearly two-thirds (62%) say that if market conditions continue as they are, they will have no choice but to put up rents by at least 10% in the next 12 months.

The rent rise will undoubtedly add to the pressures faced by tenants amid soaring energy prices and rising living costs.

Yet, it appears that landlords are conflicted with passing on costs in an already difficult climate, with just under two-thirds of them (64%) being worried their tenants may not be able to pay their rent because of rising bills.

Looking ahead, a need for landlords to make their portfolios more sustainable and meet the Government’s EPC regulations, sees nearly six out of 10 landlords (58%) saying that the sustainability and energy efficiency of their property portfolio is a priority for them.

And, to get ahead of the regulations, more than half (53%) are planning to carry out property improvements in the next 12 months to improve the energy efficiency of their portfolio.

70,000 BTL landlords exited the PRS this year Buy to Let News, Landlord News, Landlord Tax Planning, Latest Articles, Lettings & Management, Property Investment News, Property Market News

An accountancy firm says that 70,000 buy-to-let landlords have exited the UK’s rental market over the last 12 months.

UHY Hacker Young analysed HMRC data and reveals that the UK’s 2.82 million landlords in 2021 have now fallen to 2.75 million.

That means the rental market lost 116,000 buy-to-let properties and tenants saw rents rocketing.

The firm also says that the big reason for landlords exiting the market is down to the substantial tax increases they have had to endure in recent years.

Could deduct their finance costs

Previously, landlords could deduct their finance costs, such as mortgage interest, to lower their income tax bill.

That rule was changed in 2017 and the claimable amount was tapered to end completely in 2020.

The result was that most landlords paid tax on their property income – and growing numbers found they were pushed into a higher tax bracket and then made a loss as a result.

The tax landscape also saw the ending of landlords claiming ‘wear and tear’ expenses from rental income.

Landlords also saw a reduction in private residence relief in 2020 which pushed up their Capital Gains Tax bill when selling a rental property that was previously their main home.

Put some landlords off from investing

In addition, landlords also pay a 3% Stamp Duty surcharge which has put some landlords off from investing – and prevented new ones from entering the PRS.

A UHY Hacker Young spokesperson said: “We have seen an increasing number of landlords selling off or reducing their portfolios over the past year.

“Less favourable tax treatment has encouraged this exit from the sector, as well as dissuading newcomers from entering the market.”

‘Driving landlords out of the market’

They added: “Reducing the number of properties for rent by driving landlords out of the market doesn’t benefit tenants as it adds to the upward momentum on rents.

“The decrease in available properties has led to increased competition amongst renters.

“Landlords who have managed to stay in the market have benefitted from rising rents as a result of this excess of demand over supply.”

In the UK, rents have risen by 15.2% over the last five years, says the Office for National Statistics, and Rightmove says that rents will continue rising in 2023 – especially in London with demand from tenants rocketing.

It’s time for those responsible for the PRS mess to own it Landlord Crusader, Landlord News, Latest Articles, Property News

I can’t help but wonder what the future is for the private rented sector (PRS) when I look at the combined forces joined up against us.

It’s at these times I appreciate the French saying: ‘Plus ça change, plus c’est la même chose.’

Essentially, it means the more things change, the more they remain the same. And I get a gut feeling that despite all of the government’s efforts to improve the PRS, nothing will actually change.

We might see fewer landlords, more expensive rents but after all of the huff and puff, will we see more homes for rent? No, we won’t. Will we see better quality homes for tenants? No, because all of the responsible landlords will bail out.

It didn’t have to be this way because the 1988 Housing Act offered rights and obligations for tenants and landlords and the sector was reasonably regulated.

Big issue was when rights were breached

From what I’m told, the big issue was when rights were breached, neither side could really enforce their rights without spending money on a civil court dispute.

Even then, the costs and burden of proof were firmly with the landlord.

And, just like today, if the paperwork wasn’t perfect, then the landlord’s application was going to hit the buffers. Obviously, the tenant would be helped by a legal aid lawyer. That’s after they had sought advice from a tenant’s group, as well as Citizens Advice or the council.

Then, as now, enforcement is slow and for landlords not really adequate for what we need.

So, what has changed and what is likely to change?

The private rented sector was regulated

Precisely nothing. That’s because the private rented sector was regulated to an extent, but the rules weren’t enforced so bad tenants and rogue landlords could carry on as they saw fit.

The downside to that is that all landlords were tarnished with the same brush, and we’ve seen more laws regulating the sector, including licencing schemes from councils, but we don’t appear to be any further forward in having a fair and balanced regulatory framework for the PRS.

Over the years, we have seen some vigorous campaigning from various representative groups complaining about the sector being ‘unregulated’ which has led to various regulations and taxes that weren’t aimed at making things better but just made life more difficult for landlords. And less profitable.

As predicted, section 24 led to smaller landlords leaving the sector because, let’s face it, why bother running a small business when you still have to pay tax when you make a loss? No other business is expected to carry this financial weight.

Larger portfolio landlords and the big corporates have thrived and lots of smaller landlords have done very well too.

Opting for the better-quality tenant

But that’s mainly because these larger landlords are opting for the better-quality tenant and who can blame them because they don’t want their financial investment being trashed or have someone not pay rent.

That leaves tenants trying to find somewhere to live in an ever-shrinking pool of homes and with housing benefit not being increased for a few years means it’s even harder to find somewhere to live.

The situation also makes life easier for rogue landlords because they don’t care who they rent to, they just want desperate tenants who won’t complain about living in a sub-standard rented property.

That’s not the fault of landlords, it’s the fault of the government.

And in recent years we have seen growing numbers of landlords becoming fed up and deciding to move into the short-let sector but there’s no doubt there will be a clampdown on this too.

While short lets offer more profit but more work, there’s less chance of having a tenant not paying rent or trash the place.

Hassle and cost for landlords

One of the big issues I have with increasing regulation is over the hassle and cost for landlords, but the rules never seem to improve the lives of tenants.

While a council’s selective licencing scheme appears to be a great idea, I’ve mentioned before that they really aren’t because there is not enough stringent enforcement or checking of standards in rented homes.

Landlords pay, the council boosts its income, but tenants don’t really benefit.

And here we are, heading into 2023 facing a raft of new laws that will bring an end to Section 21 ‘no-fault’ evictions. The implementation of this bonkers law could see a tsunami of landlords quitting.

If a landlord can’t guarantee getting their property back when there are anti-social idiot tenants, or renters not paying rent, why bother?

Unmistakable sound of chickens coming to roost

Most of us bother because we care about our tenants but there’s the unmistakable sound of chickens coming to roost because the new rules that are aimed at protecting and helping tenants will have the opposite effect.

Less choice, higher rents, no social housing as an alternative and the ever-present rogue landlord who is supposed to disappear with new regulations will be sitting pretty knowing that their vile homes for rent will find ever-growing numbers of tenants willing to take them because there is literally nowhere else for them to live.

As they say, plus ça change – but not for the poor tenants who thought they would get better homes at a reasonable rent but actually get neither. And that really is the fault of the government who must be forced to own this mess they have created.

Until next time,

The Landlord Crusader

Property leaders urge Michael Gove to address PRS pressures Buy to Let News, Landlord News, Latest Articles, Lettings & Management, Property Investment News, Property Market News, Property News

Leading members of the property sector have written to Michael Gove calling on him to address the unsustainable pressures on the private rental sector.

They say that Government policy needs addressing to help deliver cheaper rents for tenants – because that is what most tenants want.

The letter highlights that more tenants want a cheaper rent than are concerned about the rented property’s condition, but government policy doesn’t address this point.

Instead, planned policies will push up rents for landlords – and, ultimately, rents for tenants.

The letter also makes clear that any rent freeze for tenants in England would not work – and would lead to landlords leaving the sector.

The letter’s signatories include William Reeve, Goodlord; Peter Knight, Property Academy; Gary Wright, flatfair; Theresa Wallace, Savills; Heidi Shackell, The Lettings Hub; and Ben Beadle, NRLA.

The letter to Mr Gove, the Secretary of State for Levelling Up, Housing and Communities, is below:

Open letter: Unsustainable pressures on the Private Rented Sector

To: The Minister of State for Housing and Planning (Department for Levelling Up, Housing and Communities)

We, the undersigned, are business leaders within the Private Rented Sector across the UK. With inflation hitting levels not seen since October 1981, we believe that current government policy in the rental sector — covering 35% of UK homes — is stoking housing inflation, the largest single component of the cost of living.

As set out in the recent Renters’ Reform Bill White Paper, current policy objectives include improving the quality of housing and giving tenants greater peace of mind about being evicted. These are worthy objectives which we, and most tenants, support. But tenants – whether professionals or students – also want their housing to be affordable, and current policy appears to ignore this point.

A recent survey of tenants confirms that rising levels of rent are tenants’ biggest single concern, cited by 86% of respondents. By contrast, the condition of rented properties, a priority of the Renters’ Reform Bill, while also a significant concern, is cited by fewer than half as many tenants: 42%.

Government policies to restrict landlords’ legal rights, raise minimum energy efficiency standards to an EPC band C, extend mandatory local licensing, raise taxes on property income and transactions, enhance compliance obligations for HMOs, and increase maintenance costs are putting undue pressure on landlords — most of whom have only one or two rental properties. Already, we see net negative repercussions on rental supply, with many landlords leaving the sector; property portal data shows that supply is down 46% compared with the five-year average.

At the same time, tenant demand is at an all-time high, with portal traffic up 142%. Many surviving landlords are understandably looking to cover their increased costs via higher rents. Goodlord’s Rental Index saw rents on new tenancies in September hit £1,249 pcm, up 13% on the same period in 2021. Rent increases restrict mobility and supply, with tenants frightened to move house for fear of facing even higher rents in a new home.

By failing to encourage adequate supply, government policy is directly contributing to the sharp increases in rental prices.

Freezing rents in response, as recently introduced in Scotland and proposed by London’s Mayor, would further damage the sector, restricting supply to a greater extent and fuelling landlords’ withdrawal from the sector. We urge the government instead to consider ways to improve supply – while continuing its aspirations to ensure quality homes for tenants – by ensuring the rental sector remains an attractive place to invest without relying on skyrocketing — and ultimately inflationary — rents.

Lib Dems call for a Christmas evictions ban Buy to Let News, Landlord News, Latest Articles, Property Investment News, Property Market News, Property News

The Government is being urged to implement a ban on evictions over Christmas in the private rented sector by the Liberal Democrats.

The party’s leader, Sir Ed Davey says that thousands of families face ‘a nightmare before Christmas’.

In addition to the eviction ban for renters, Sir Ed is also calling for the government to prevent banks from repossessing homes over the festive period.

He says that ‘no-one should face losing their home’ and highlights that rising interest rates have affected lots of homeowners after the market turmoil that followed Liz Truss’s mini-Budget.

The Lib Dems say that 62,500 mortgage holders will see the end of their fixed rate deals with many moving onto higher rates. Their repayments could increase by £3,000.

Offer grants of £300 a month to homeowners

The party now wants the government to offer grants of £300 a month to homeowners for up to a year for any homeowner who sees their mortgage repayment increase by more than 10% of their household income.

The government says it has met with finance lenders to ensure that those mortgage holders who are struggling financially are being supported.

The Lib Dems say they also want to see an immediate ban on evictions and home repossessions between now and 31 December – it would run along similar lines to the pandemic eviction ban.

Sir Ed says he wants the government to implement urgent legislation before Parliament’s Christmas recess to re-enact a ban on no-fault evictions.

Section 21 ‘no-fault’ evictions being banned

The Lib Dems are also calling for housing benefit to be increased and for the implementation of the legislation that would see Section 21 ‘no-fault’ evictions being banned.

In response, a government spokesperson said an extra £50 million was being delivered to help prevent evictions and help secure places for people to live in.

The spokesperson added that the most vulnerable households were being offered cost of living payments and support with their energy bills.

The spokesperson also pointed out that the government is looking to ensure a fair deal for renters and deliver on its commitment to abolish section 21 evictions.

Homebuyers still need the PRS as many struggle to save Buy to Let News, Landlord News, Latest Articles, Property Market News, Property News

Tenants who want to buy a home are having to rely on the Private Rented Sector (PRS) for longer, but this will put pressure on the supply of homes and push up rents, one bank says.

Paragon has surveyed more than 2,000 would-be homebuyers and found that the cost-of-living crisis is hampering their efforts to purchase a home.

And that means they have to rent for longer which, in turn, means there are fewer homes for rent and the demand will lead to higher rents.

PRS tenants say they are currently saving

The bank’s survey found that 35% of tenants say they are currently saving so they can buy a home and, of those, 73% are saving for a deposit.

But with bills rising, 56% say they are ‘slightly confident’ or ‘not confident’ that they will be able to generate the spare cash to save.

As a result, 40% of renters say they will be able to get a deposit together in the next year or two, but 44% of those who say they aren’t confident about saving enough fear their hopes to buy a home will take between three to five years.

The survey also reveals that 28% of tenants who are confident about raising a deposit say they will do so within the next year.

‘The pressure placed on household finances’

Richard Rowntree, Paragon’s managing director for mortgages, said: “Our latest tenant research confirms the logical expectation that the pressure placed on household finances will limit the capacity for some people to save for the deposits necessary to buy their own home.”

He says that this will see most tenants in the PRS having to rent for longer because the cost-of-living crisis means they can’t save enough for a deposit and to secure a mortgage.

Mr Rowntree said: “In turn, this will place further pressure on the supply of rented homes which is already surpassed by demand, exacerbating rising rents and limiting choice for tenants.”

The bank’s survey also found that 37% of buyers are looking to save a 10% deposit, which is the most common size, with 23% of tenants saying they have already saved this, while 4% are in the process of buying a home.

Landlords – what are your suggestions to better the current chaos in the PRS? Buy to Let News, Landlord News, Latest Articles, Property Investment News, Property News

Hello, Every landlord, big or small, must by now have felt the effects of repeated changes to legislation and taxation in regards to the PRS.

On any landlord forum you will find lists of landlords giving lists of what is wrong with the system, but I’ve yet to read anybody giving tangible solutions.

So, as a landlord, what are your suggestions to help fix this sh**storm that is the current PRS?

My starter for 1.) Government buys property from landlords who want to sell up at market price minus CGT and any refurb costs. Landlord pays no CGT on the sale, but have the option to refurb (if necessary) to a set habitable condition before sale. Tenants don’t lose their homes, landlords don’t lose money for selling with tenants “in situ”, more housing stock moves back to government ownership, and the revenues lost from the CGT are offset by local council not having to bear the longer-term costs of “rehoming” tenants in hotels/hostels who’ve been evicted by property sales.

2. (This one is bound to be contentious but hear me out)…
Make non-payment of rent a CRIMINAL offence. However altruistic we may wish to be, at the end of the day, in any other sector, if you take something (be it an object or a service) and don’t pay for it that would be classed as THEFT! Most long-term landlords will at some point have to deal with the a**e-tightening ordeal that comes when a tenant stops paying rent. While there will be some genuine cases where circumstances have contrived to put tenants in a desperate hole, in the majority of cases tenants stop paying rent because they know they can get away with it – with little or no comeback. If a tenant owns nothing, doesn’t work, and has no guarantor to answer to, then what do they have of value to lose apart from their liberty? If there is actually a serious consequence (other than 9 months rent-free and moving onto the next sucker) when rent goes into arrears, would this not be more incentive for tenants to pay and landlords not be forced to evict as a consequence? Aside from being fairer to the good tenants who now don’t face eviction (because their landlord has had enough and is selling up), a criminal conviction for rent arrears is a fair reason for automatic eviction (and also future reason for refusal to rent) that could easily be flagged up on a credit check without the costly expense of a “rogue tenant” database. This in turn saves landlords the expenses of s21/s8, and baliffs fees, saves court fees spent on the chancers and time-wasters, and frees up courts for geniune cases where there’s been a valid reason for non-payment.

3. In those cases where tenants believe they have a genuine case against disrepairs/a rogue landlord then rent should still be paid into a holding account with a tenancy dispute company (similar to the deposit companies) until the case is heard. Then if the case is found to be invalid the landlord gets his money due, or money can be taken from the accrued account to pay for necessary repairs etc. None of this unnecessary “rogue landlord” database b****cks, or “no win- no fee” ambulance-chasing lawyers that are springing up.

There’s bound to be holes in my arguments, but what else would you, as a landlord, suggest to make the system better?

Thank you,

Raz

Rented home demand to remain strong as FTBs put off buying Buy to Let News, Landlord News, Latest Articles, Property Market News, Property News

More than a million Brits under the age of 45 could rule themselves out of the first-time buyer market due to financial pressures caused by the cost-of-living crisis, a survey reveals.

The findings from Aviva focused on under 45s who have never owned a property and found that just under half (46%) of them are not currently house hunting.

They say that they intend to in future, but 16% say they have no intention of doing so.

Of these, one in five (20%) specifically cited the cost-of-living crisis and inflation as making buying a house unaffordable.

Forced to shelve plans to buy for the first time

If these attitudes were reflected proportionally among those who are not homeowners across the UK, this equates to more than a million people under 45 being forced to shelve plans to buy for the first time.

The survey also shows the cost of a mortgage is being substantially underestimated, with the potential to dissuade more people from moving onto the property ladder.

Across the country and all age groups, survey respondents intending to buy or in the process of buying their first property say they expect to pay £196,700 on average and anticipate putting down £25,210 as their deposit.

Based on these figures, they say they are expecting a monthly mortgage payment of £718.60.

However, when these figures were put into a high street building society online mortgage calculator, the results show that those buyers would be paying £1,103.86 per month on a 2-year fixed deal, or £928.07 monthly on a 2-year base rate tracker – that’s an underestimation of up to 54%.

‘People juggling competing financial demands’

Matt McGill, the managing director of Aviva Equity Release, said: “The cost-of-living crisis, and other factors resulting in higher inflation and interest rates, have put pressure on people juggling competing financial demands.

“Events of the past few months have created uncertainty; nobody can predict the outlook for the coming months with any confidence.”

He added: “Despite resilient housing market activity, it now appears rising mortgage rates are dissuading many from taking that important first step onto the property ladder.

“In years to come, this will have a knock-on effect on younger people today.

“Wealth held in property contributes greatly to someone’s overall assets and can be used as a valuable source of funds, particularly later in life.”

£82.7bn worth of rental properties occupied by fraudsters Buy to Let News, Fraud, Landlord News, Latest Articles, Lettings & Management, Tenant Eviction

The rental sector has long been a leading target for fraudsters, criminals and money launderers with previous research estimating that 5% of all rental stock is being let to criminals.

Ocasa, the specialist rental platform, says that equates to 279,497 properties.

Based on the current average house price, this means that £82.7 billion worth of property is occupied by people who, in the best-case scenario, aren’t paying rent.

And, in the worst cases, are using the property to facilitate criminal enterprises, such as cannabis farms.

Unwittingly enabling criminals to occupy their rental properties

For landlords, letting agents and management companies, it can be difficult to say with absolute confidence they are not unwittingly enabling criminals to occupy their rental properties, and now Ocasa has compiled some of the most common signs of rental fraud scams that everyone should be on the lookout for.

Common Rental Fraud Scams

  • Defaulting on rent: One common fraudster scam is to move into a property quickly and live there rent free for as long as possible. If decisive action isn’t taken at the first possible opportunity, it can become a drawn-out waiting game while the landlord tries to secure an eviction. The average monthly rent is currently £1,177, so the losses to the landlord quickly pile up.
  • Money wire transfers: Wire transfers are a common way for criminals to try to defraud landlords and property managers. A red flag is when a cheque is issued and given to the landlord for more money than has been requested. The fraudster will then ask for the excess money to be returned to them before the whole cheque bounces, by which time the tenant has made their money and probably disappeared.
  • Fake financial records: Fraudster tenants will often provide fake financial information that makes them appear much wealthier and more reliable than they are in the hope that landlords and agents feel comfortable enough to slack on any other background checks and, before they know it, it’s too late and the tenant is entrenched in the property.
  • Illegal sublets: Scammers will often rent homes with the sole intent of illegally subletting them to someone else for profit. In such cases, when landlords come around to chase rent arrears, they find an entirely different person living in the property instead of the one who legally owes them the unpaid rent.
  • Identity fraud: Fake IDs are commonly used, as are fake credit reports and references. The tenant then occupies the property, fails to pay rent and is then untraceable when arrears are chased because the information the landlord has is completely fabricated.

How to evict a fraudster tenant

  • Stay within the law: First and foremost, don’t respond to criminality with more criminality. Stay within the letter of the law throughout your attempts to evict a fraudster tenant. Failure to do so will only complicate matters and likely result in the situation lasting much longer than it needs to.
  • Follow the right protocols: While it might be galling to have to follow the strict eviction protocols when your tenant themselves is a criminal, it’s important you do. This means serving them with a Section 8 notice as you would any other rogue tenant. You can then follow this up with a possession order.
  • Act with speed: As soon as you suspect someone is awry, be it a suspect financial record or a missed rent payment, act immediately. Any hesitation only allows your rogue tenant to stay in the property for longer. Reach out to the proper authorities as soon as you can and report your suspicion.
  • Be fastidious with records: Obsessively record everything you do towards evicting a fraudster tenant. Make a note of the date and time of every phone call or correspondence along with what was said and who said it. Keep track of all efforts you’ve made to reach out for help and make note of exactly what you think the tenant is doing wrong.

FAO Shelter – This is not a love note from The Landlord Crusader Landlord Crusader, Landlord News, Latest Articles, Property Investment News

It’s a good job I was sitting down when I read a striking story on Property118 this week because it would normally have knocked me off my feet otherwise.

Was it, I hear you ask, the Government announcing that their Rent Reform white paper is nonsense and will be ditched? Nope. Was it the prospect of Section 21 being retained? Nope.

It was much, much better than that. It was someone from Shelter asking the Government to step in and stop landlords from leaving the private rental sector.

That’s right. Someone from the homeless charity that doesn’t actually house anyone was urging action to stop landlords from leaving the PRS.

I had to read it twice before my brain would believe it.

Fed-up landlords leaving the PRS

This is what the quote in the story about fed-up landlords account for 16% of property sales said:

However, with so many landlords leaving the sector, homeless charity Shelter says the impact will be felt most by those on low incomes.

Ruth Jacob, the charity’s policy expert at the charity, urged the Government to act.

She told the Telegraph: “We’re already seeing a severe shortage of affordable homes to rent for people on the lowest incomes and that’s already leaving more and more people at risk of homelessness.”

There’s nothing on their website about this, though I did see Shelter’s chief executive officer Polly Neate on BBC Breakfast warning that there is an issue of people over the age of 65 not living in council accommodation or owning their own home.

Instead, they stand a good chance ‘at their time of life’ of being made homeless because landlords are leaving the PRS.

Why landlords are leaving

Again, the interviewer didn’t ask the killer question about why landlords are leaving.

Polly did though get to plug that 5% of sales from M&S’s Festive Food on the Move range will help fund Shelter’s hotline.

So, to all you landlord haters and vocal supporters of Shelter, let me spell out for you what is going on.

Shelter (and the likes of Generation Rent) have been working for years to reduce landlord rights to the benefit of tenants.

The vilification has been unbearable – and it is getting worse.

We must be the only group of people you can discriminate against and criticise without any comeback.

Working out whether it’s worth carrying on

This, along with rising interest rates, rising mortgage rates, more legislation and reduced profits (yes, Shelter, we need to make money) means landlords are working out whether it’s worth carrying on.

So, while the Gas Safety checks and improved electrical checks are worthy, things like growing numbers of council licensing schemes are not and they only push up costs. Those costs have to be met by someone.

And not all landlords are evil, exploiting property so poor people pay for landlords to sleep on pillows filled with £50 notes.

If only.

Instead, landlords are deciding in increasing numbers that it is no longer worth the time and hassle of providing homes anymore.

Private landlords keen to offer shelter

Don’t get me wrong, there will always be private landlords keen to offer shelter (see what I did there?) to those who are homeless or in need.

But – and it’s important that you understand this point – section 21 means we can remove tenants who don’t pay rent or make their neighbours’ lives a misery, from our homes – but its proposed abolition (which you support) means we will find it even harder to remove rogue tenants.

For other landlords, the prospect of having to meet an EPC rating of C by 2025 (still not a legal requirement yet) is the final straw for them.

Others just want to get out, so they don’t have to be hounded by the likes of Shelter and Generation Rent.

And when landlords sell, it is usually to a homebuyer and not another landlord, so the property won’t be rented out again.

We understand this.

And now it appears you do too.

Urging the government to stop landlords from selling up

This is a shame because urging the government to stop landlords from selling up is like the boy who cried wolf. You can’t denigrate and undermine landlords for years and then say ‘Whoa! Why are landlords leaving? There won’t be homes to rent. Something must be done…’.

It’s too late. You have made a bed you don’t like and if you think it’s bad now – wait until next year when landlords have to remortgage at monster rates and see how many pack it in then.

And if they don’t leave, I can guarantee a stampede to the door marked exit if Section 21 is abolished.

You have never talked to us. We have always been the bad guys. Most of us want to provide quality homes for tenants that are safe and secure.

I for one am sick of landlords being not only ignored but victimised for offering tenants somewhere to live and being blamed for it.

Selling off council houses and not building new ones is where the issue lies with our current housing catastrophe – and that’s down to EVERY government since Thatcher, NOT landlords.

But then, if we had more social housing, you wouldn’t be needed. And the day you close your doors will be a great day for housing in this country – and a really great day for landlords everywhere.

Until next time,

The Landlord Crusader

Decent Homes Standard in the PRS needs to be fully resourced Landlord News, Latest Articles, Lettings & Management, Property News

Propertymark has responded to the Department for Levelling Up, Housing and Communities (DLUHC) consultation on the Decent Homes Standard in England by offering clarity on how to deliver greater parity between the social and private rented sectors.

The organisation says that its response will help ensure landlords who do not treat their tenants fairly are held accountable.

The responsibility of enforcing these rules will often lie with the local authority but many, as Propertymark highlights, struggle to enforce the current standards within the private rented sector.

Any additional responsibilities for local authorities will be difficult to manage without additional resources.

Recommendations before implementing the Decent Homes Standard

In addition to offering more resources to local authorities, Propertymark has urged that DLUHC consider the following recommendations before implementing the Decent Homes Standard:

Focus on prevention rather than prosecution – to ensure that the standard of homes improves, resources should be focused on providing information to landlords and support to enable them to meet the standard, rather than using fines as a first response to any breaches

Develop national guidelines for local authorities – our members have expressed concerns over the potential for inconsistent enforcement and standards across England. National guidelines would increase the consistency of the Decent Homes Standard

There should be some accountability for tenants – if the breach in standards is due to a lack of care or neglect by the tenant, the landlord should not be liable for the violation. This is especially important when dealing with the issue of mould.

‘Support greater standards for homes within the private rented sector’

Timothy Douglas, Propertymark’s head of policy and campaigns, said: “It’s hard to find a reason not to support greater standards for homes within the private rented sector.

“Tenants should expect a certain standard when renting from any agent.

“The Decent Homes Standard creates a level playing field that our members will appreciate as they already go above and beyond what is expected of them.”

He added: “That being said, the DLUHC needs to understand the immense strain local authorities are facing when delivering their current duties regarding existing standards.

“Sufficient resources and commitment will be required to ensure consistent and regular enforcement of the Decent Homes Standard.”

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.”

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