Tag Archives: residential

Mezzanine Finance for Developers Commercial Finance, Latest Articles

(By Malcolm Jones of Brooklands Commercial Finance)

Despite the Banks recent profit announcements, Developers are still being frustrated by their continued reluctance to lend. When Banks are prepared to lend on development projects the percentage of costs or of the Gross Development Value (GDV) is often so low that it is not workable.

Many borrowers are now turning to Commercial Finance Brokers such as ourselves to assist with raising the total finance required.

Most property development loans can be broken down into Senior Debt loans and Mezzanine Loans. The Senior Debt element is the amount lent by the bank or finance company and this is often limited to 60% of the costs. Mezzanine finance is a second charge loan that sits on top of the senior loan and hence the name “Mezzanine”.

Mezzanine Finance

Due to the dramatic drop in bank lending to the property sector in recent years, many successful and profitable residential developments have made use of Mezzanine finance. With the Senior debt lender funding 60% of the costs the Mezzanine lender will often lend 30% of the costs, leaving a requirement of only 10% from the developer.

The finance can cover the costs of the land purchase, site and infrastructure costs, build costs and professional fees.

By using Mezzanine finance the developer is able to reduce his equity contribution, spread his risk and considerably enhance the percentage return on his own invested funds. Although Mezzanine finance is more expensive than Senior debt, there are many financial advantages.

For example:

Mr A goes for low gearing Mr B goes for high gearing
Mr A invests £200,000 in building 1 house Mr B invests £200,000 in building 6 houses
The GDV is £600,000 The GDV is £3,600,000
Finance at 50% £200,000 Finance at 90% £1,800,000
Finance cost £50,000   Finance cost at £450,000
Net Profit £150,000 Net Profit £550,000
Gross Profit 33% Gross profit 33%
Return on developers money 75% Return on developers money 275%

Because of the increased risk to the mezzanine company, they look for experience developers, good projects and a reasonable profit level.

If you require any assistance with Development finance please Click Here

Mezzanine Finance


NLA warns landlords of “no win no fee” deposit protection lawyers Latest Articles, NLA - National Landlords Association, UK Property Forum for Buy to Let Landlords

Speaking recently on BBC Radio 4 Carolyn Uphill, Chairman of the National Landlords Association (NLA) warned landlords to ensure their tenants’ deposits are properly protected and that they’ve fully complied with Tenancy Deposit Protection (TDP) law.

The warning comes after a growing number of information requests to TDP schemes from ‘no win no fee’ claims companies who, on behalf of tenants, are targeting landlords who may not have fully protected deposits.

All landlords in England and Wales must by law protect their tenants’ deposits within a Government authorised TDP scheme and must also ensure that they pass on important information about where and how it was protected – known as the Prescribed Information – to the tenant within 30 days from the start of the tenancy.

Failure to do so could lead to heavy penalties and claims companies seem to be inviting tenants who haven’t received their prescribed information to make a claim against their landlord – even if the deposit is protected.

Carolyn Uphill, Chairman of the NLA said:

“You have to ask where the financial loss for the tenant is. The majority of tenant’s deposits are being protected and ninety nine per cent of tenancies end without any issues over the return of the deposit. Where problems do arise, the tenant has access to a free and impartial decision using the scheme’s dispute resolution service.

“Of course, where there is blatant disregard for the law landlords can have no argument and must be brought to rights. However, these claims firms are looking to exploit those landlords who have protected their tenant’s deposits but may not have properly issued the prescribed information.

“In practice this could simply mean not providing their tenant with a leaflet about where the deposit is protected.

“This sort of action is morally questionable, unnecessarily punitive and will only work to undermine the good relationship that exists between the majority of landlords and their tenants”.

Eddie Hooker, CEO of Tenancy Deposit Scheme my|deposits, also commented:

“It has always been the landlord’s responsibility to protect the deposit and a vital part of the process is to pass the Prescribed Information on to the tenant.

“Landlords must be aware that they are ultimately responsible even if they use a letting agent. Our advice is to check with your agent or directly with your deposit protection scheme to ensure all of your deposits have been properly protected.

“Those who fail to comply with either step of the legislation leave themselves open to potential fines of up to three times the deposit value and could fall prey to these kinds of claims companies.

Mark Alexander, founder of Property118 recently highlighted the marketing activity of these companies – see this thread.

Mark Alexander also commented:-

Following the case of Superstrike Limited vs Rodrigues at the Court of Appeal it is now unclear whether landlords should have re-issued Prescribed Information when when a tenancy became Statutory Periodic at the end of a fixed term. The ruling was that deposits taken pre April 2007 should have been protected when a new statutory periodic tenancy came into being after Tenancy deposit Protection laws came into force. This is because it is now clear from legislation that a Statutory Periodic Tenancy is a new tenancy and that all deposits taken in respect of new tenancies should be protected. What is not clear is whether a deposit which was protected and remained protected needs to be re-protected and new deposit protection certificates and prescribed information to be served. The guidance issued by the Deposit Protection Schemes is  unclear on this point and concludes that only new legislation or a ruling in the High Courts will clarify this matter. To date, no lawyers have publicly announced a solution which could protect landlords and letting agents from claims if such a ruling goes the wrong way.

Tenants Claimline

 


12.5% return on cash invested on a newly refurbished Manchester based development Commercial Finance, Latest Articles, Property For Sale

Last week I was presented with a Manchester based buy-to let investment opportunity which looks particularly attractive. The gross yield is just over 11% but with the benefit of gearing, and having allowed for all costs, the cash on cash returns are coming out at 12.5%. Manchester Buy to Let

I have done some due diligence (you should always do your own though, please don’t rely on mine) and part of that was checking out the availability of finance on these properties.

The only possible drawbacks I can see thus far is that the maximum mortgage is 65% of value plus a lender fee of £995 added to each loan. This is due to the properties being priced at £42,500 and being sold as a new development. The issue with this is that BM Solutions are the only lender offering terms. As BM Solutions are part of the Lloyds Banking Group that can sometimes cause problems due to the group having a rule not to provide more than three mortgages to any one client. The Lloyds Banking Group includes Lloyds Bank, BM Solution, The Mortgage Business, Halifax and C&G.

If you can live with that, and especially if you are married or have a partner, and you and your partner have no mortgages with any of these companies, you could, theoretically at least, buy six of these properties, i.e. 3 each.

The alternative, of course, is to buy the properties for cash and then look to refinance them based on market value after say 6 months.

In the meantime, these are the numbers that came out when I analysed the deal using the Property118 Landlords Calculator:-

Property valued at £50,000 each (15 available, 18 already sold at full price)

Discount offered to Property118 to sell the remaining units 15%

Net price £42,500 each

Monthly rent £400 (based on comparables provided by local agents)

Gross rental yield 11.29%

Mortgage £28,620 based on 65% borrowing plus £995 lender fee added to advance

LTV 67.34%.

Deposit required for each property £13,880.

Interest rate 4.84% (Loan via BM Solutions – IFA to advise best product, this one was selected at random for illustrative purposes)

Mortgage interest £115.34 per month

I have estimated that 35% of rental income will be required to fund the costs of; advertising/letting, management, Gas checks, maintenance, ground rents, service charges and void periods This equates to a monthly averaged cost of £140.

Therefore, cashflow based on the current interest rate is £144.57 per month

Based on these figures the return on equity is 12.5% on cashflow alone. This is net annual cashflow expressed as a percentage of the equity in the property. This calculation is also referred to as; return on cash, cash on cash return, return on capital employed/invested, ROC and ROCI. A 12.5% return on equity is far better than you would get in a bank account and far greater than you can borrow money for too. Over the long term you may also wish to factor capital appreciation into the equation too.

This deal breaks even when interest rates hit 10.9%

If this is of interest and you would like to download details of the development with a view to arranging a viewing and/or making an offer please complete the form below.

Oops! We could not locate your form.


Landlords Warnings – Will You Survive the Mayhem? Latest Articles

Have you read the book recently published by Mary Latham yet?Mary Latham

I’ve been talking to Mary about some of the topics in it this week and O – M – G this is going to ruffle feathers!!!

This is certainly not your bog standard “how to buy to let” book by all accounts, but if you know Mary you’d never expect that of her either. If that lady has a bee in her bonnet best stand well back I can tell you.

I have to confess to not having read the book yet as I’ve been off on tour around Eastern Europe but I will be getting hold of a copy very soon as it’s been getting some amazing reviews.

I could have done with having this book with me whilst flying to Russia or the Czech Republic over the last few weeks. We all know how boring flights can be don’t we? I’ve also heard that reading this book is a great way to avoid getting DVT as it will get your heart pumping LOL.  As there are just 147 pages of content is just about right to read on a flight, a long journey or if you are off to a nice beach this year ….

Based on the reviews I’ve already read I am looking forward to getting stuck in yet slightly pensive at the same time. When an ordinarily optimistic landlord like Mary Latham, who has with 40+ years experience in being a landlord, says she see’s the storm clouds gathering and explains why we should ALL take notice.

The book is available as a paperback for £4.64 including delivery and just £1.36 if you are happy to read it on Kindle or the Kindle App for iPad. Either way, click here to order your copy.

Reviews posted on Amazon.co.uk

5.0 out of 5 stars An essential read for those wanting a balanced view of the property market in the UK,
A detailed thoroughly researched book from an experienced landlord.

This book although in some parts quite technical covers the parts that all the get rich quick schemes manage to miss out. The questions that they ask you to save to the end of their presentations and never manage to answer and the risks that many will look into – when they come to it.

Mary covers the latest legislation, the impact of austerity measures, the banking crisis and the topics that would be almost unbelievable if it were not true! (Landlords being charged thousands to dispose of their tenants rubbish bins and recycling) to the impact of Universal Credit on Landlords and those that are unfortunate enough to have to claim benefits.

Some say the combination of these factors will create the perfect storm and others a tornado that will impact our lives significantly. Whatever boat you’re in this book is essential reading to ensure you understand the facts and then put countermeasures in place to ensure you are not a victim of this crisis. Written by a true expert and recognised as such by the National Landlords Association and Homestamp – ignore this perspective from a full time landlord at your peril.

5.0 out of 5 stars A well worth read!

As an established landlord I was unsure whether the book would be worthwhile to me. How wrong could I be!!! I benefited from an insight into a seriously experienced property guru who briefed the reader in a clear and coherent way of real life experiences, past and present legislation as well as money saving tips and references for landlords. The money I have already saved by following just a one of her expert tips has already compensated for the cost of the book twenty fold. Unlike a text book, the author writes in a light hearted way but with an underlying seriousness. I would unreservedly recommend this book to any landlord whether they are a novice just starting out or a well established agent/landlord.

Lots more equally positive reviews here.

When you have read the book yourself please do me a favour and post a review in the comments section below as well as on Amazon.

PLEASE buy this book (and READ IT!), if for no other reason than to help me say thank you to Mary for posting over 600 helpful comments on this website alone!  We are talking about less than a fiver people – COME ON!

This is the link to Amazon to BUY THE BOOK

PS – best to do it now whilst you remember.

Mary Latham


Private Rented Sector Review – Conclusions and recommendations Landlord News, Latest Articles

The Private Rented Sector Review conclusions and recommendations published by the Communities and Local Government Committee:

Simplifying regulation

1.  We recommend that the Government conduct a wide-ranging review to consolidate legislation covering the private rented sector, with the aim of producing a much simpler and more straightforward set of regulations that landlords and tenants can easily understand. As part of this review, the Government should work with groups representing tenants, landlords and agents to bring forward a standard, plain language tenancy agreement on which all agreements should be based. There should be a requirement to include landlords’ contact details in tenancy agreements. (Paragraph 13)

2.  We recommend that the Government consult on the future of the housing health and safety rating system and the introduction of a simpler, more straightforward set of quality standards for housing in the sector. The Government should also ensure that planning and building regulations are consistent with standards for the quality and safety of private rented housing. (Paragraph 18)

Increasing awareness

3.  We recommend that, once the review of the legislative framework we have called for is completed, the Government, working with tenants’, landlords’ and agents’ groups, establish and help to fund a publicity campaign to promote awareness of tenants’ and landlords’ respective rights and responsibilities. Our recommendation for a wholesale review of the regulation in the sector provides the obvious platform on which to base a publicity campaign. (Paragraph 24)

4.  We recommend that the Government bring forward proposals for the introduction of easy-to-read key fact sheets for landlords and tenants, and consult on the information these sheets should contain. The sheets could include links to further information available online. As a minimum, the sheets should set out each party’s key rights and obligations, and give details of local organisations to whom they could go for further advice and information. This fact sheet should be included within the standard tenancy agreement we propose earlier in this chapter. (Paragraph 25)

Raising standards

5.  Some local authorities are doing excellent work to raise standards in the private rented sector, but there appears to be more scope for sharing this good practice, so that all councils are performing to a high standard. The Local Government Association should, as part of its sector-led improvement role, make sure that mechanisms are in place to ensure all councils learn from the good practice and take effective steps to improve standards of property and management in the private rented sector. (Paragraph 30)

6.  We are concerned about reports of reductions in staff who have responsibility for enforcement and tenancy relations and who have an important role in making approaches to raising standards successful. Given the financial constraints that councils face, it is important to identify approaches to raising standards that will not use up scarce resources. One approach is to ensure that enforcement arrangements pay for themselves and help to fund wider improvement activity. Therefore, where possible, the burden of payment should be placed upon those landlords who flout their responsibilities. (Paragraph 31)

7.  We recommend that the Government consult on proposals to empower councils to impose a penalty charge without recourse to court action where minor housing condition breaches are not remedied within a fixed period of time, though an aggrieved landlord would have the right of appeal to a court. (Paragraph 33)

8.  We recommend that, where landlords are convicted of letting property below legal standards, local authorities be given the power to recoup from a landlord an amount equivalent to that paid out to the tenant in housing benefit (or, in future, universal credit). We hope that such a measure will help to prevent unscrupulous landlords from profiting from public money. Local authorities should be able to retain the money recouped to fund their work to raise standards. To ensure a consistent approach, those tenants who have paid rent with their own resources should also have the right to reclaim this rent when their landlord has been convicted of letting a substandard property. (Paragraph 37)

Illegal eviction

9.  We do not agree that a statutory duty to have to take steps to tackle illegal eviction should be placed on local authorities, as it would be inconsistent with a localist approach. Nevertheless, it is again important that local authorities learn from each other and share best practice on tackling illegal eviction. The Local Government Association should ensure that lessons on illegal eviction are learnt and disseminated. (Paragraph 38)

10.  We are concerned that the police are sometimes unaware of their responsibilities in dealing with reports of illegal eviction. We recommend that the Department for Communities and Local Government work with the Home Office on guidance that sets out clearly the role of the police in enforcement of the Prevention from Eviction Act 1977. (Paragraph 39)

Licensing and accreditation

11.  The idea of national licensing has some merit, and such a scheme could bring a number of benefits, particularly if introduced alongside an effective system of redress. It is clear, however, that the Government has not been convinced by these arguments, and we have some sympathy with the Minister’s assertion that a national scheme could be very rigid. Having tailored local schemes may bring its own costs, especially for landlords operating across several areas, but on balance we would prefer to see local authorities develop their own approaches to licensing or accreditation in accordance with local needs. The Government’s focus should be on giving local authorities greater flexibility and encouraging the use of existing powers. (Paragraph 43)

12.  We recommend that the Government bring forward proposals for a reformed approach to selective licensing, which gives councils greater freedom over when licensing schemes can be introduced and more flexibility over how they are implemented. Councils should ensure that the cost of a licence is not set so high as to discourage investment in the sector. (Paragraph 49)

13.  We recommend that the Government give local authorities a power to require landlords to be members of an accreditation scheme run either by the council itself or by a recognised landlords association. (Paragraph 53)

14.  It is important that local authorities have options and tools to raise standards in their areas. Three particular options are: (1) greater use of landlord licensing schemes; (2) compulsory accreditation; and (3) taking a proactive neighbourhood approach to raising standards. In each of these cases, given resource constraints, the schemes have to pay for themselves, and, as far as possible, place the burden of payment on the unscrupulous landlords, with financial deterrents for non-compliance. Councils should be given the powers to impose heavy penalties on those who do not register for licensing or compulsory accreditation after appropriate notification. Neighbourhood approaches could be funded by local authorities recouping costs from landlords whose properties fail to meet minimum standards. We further recommend that the Government initiate a review of the fines imposed by the courts for letting substandard properties, to ensure they act as a sufficient deterrent. (Paragraph 55)

Houses in multiple occupation (HMOs)

15.  We recommend that the Government conduct a review of the mandatory licensing of houses in multiple occupation. This review should consider, amongst other things, evidence of the effectiveness of mandatory licensing, how well it is enforced, and whether the definition of a prescribed HMO should be modified. (Paragraph 58)

16.  Where there are community concerns about high concentrations of houses in multiple occupation, councils should have the ability to control the spread of HMOs. Such issues should be a matter for local determination. We therefore consider it appropriate that councils continue to have the option to use Article 4 directions to remove permitted development rights allowing change of use to HMO. (Paragraph 63)

17.  Universities have a responsibility to ensure that student housing does not have a detrimental impact upon local communities. They should be working with local authorities and student groups to ensure that there is sufficient housing in appropriate areas and that students act as responsible householders and members of the community. (Paragraph 64)

Safety standards

18.  We recommend that the Government work with the electrical industry to develop an electrical safety certificate for private rented properties. To obtain such a certificate, properties should be required to have a full wiring check every five years and a visual wiring check on change of tenancy. Landlords should be aware of the legal requirement to provide safe installations and appliances. (Paragraph 66)

19.  We recommend that the Government introduce a requirement for all private rented properties to be fitted with a working smoke alarm and, wherever a relevant heating appliance is installed, an audible, wired-up EN 50291 compliant carbon monoxide alarm. (Paragraph 67)

Regulation of letting agents

20.  We recommend that, as part of its consultation on the redress scheme, the Government seek views on how best to publicise such a scheme and what penalties should be in place for those agents who do not comply. The Government should also explore how the redress scheme fits alongside existing arrangements for deposit protection. We further recommend that the redress scheme is accompanied by a robust code of practice that sets out clear standards with which agents are required to comply. (Paragraph 74)

21.  We recommend that the Government make letting and managing agents subject to the same regulation that currently governs sales agents. This includes giving the Office of Fair Trading the power to ban agents who act improperly, and making client money protection and professional indemnity insurance mandatory. (Paragraph 78)

22.  Any proposal to require sales agents to meet minimum professional standards before they begin trading should also be applied to letting and managing agents. In addition, if at any point a requirement for sales agents to be registered with an accredited industry body is to be introduced, this should be part of a wider framework also covering letting and managing agents. We recommend that the Government review these arrangements in two years’ time. (Paragraph 78)

Agents’ fees and charges

23.  We recommend that the code of practice accompanying the new redress scheme include a requirement that agents publish a full breakdown of fees which are to be charged to the tenant alongside any property listing or advertisement, be it on a website, in a window or in print. This breakdown should not be “small print”, but displayed in such a way as to be immediately obvious to the potential tenant. The code should also require agents to explain their fees and charges to tenants before showing them around any property. Furthermore, the code should forbid double charging, and there should be a requirement that landlords are informed of any fees being charged to tenants. If agents do not meet these requirements, the fees should be illegal. Finally, the professional bodies should make a commitment to full, up front transparency on fees and charges a requirement of membership. (Paragraph 83)

24.  We intend to gather further information on the impact in Scotland of the decision to make fees to tenants illegal, and to return to this issue in 2014. (Paragraph 86)

Longer tenancies

25.  The demographics within the private rented sector are changing. No longer can it be seen as a tenure mainly for those looking for short-term, flexible forms of housing. While some renters still require flexibility, there is also an increasing number, including families with children, looking for longer-term security. The market, therefore, needs to be flexible, and to offer people the type of housing they need. The flexibility of assured shorthold tenancies should be better exploited, and the option of using assured tenancies should also be considered where these meet the needs of landlords and tenants. That we are beginning to see some institutions and housing associations offering longer tenancies under the current law suggests that we do not need legislative changes to achieve them. Rather, we need to change the culture, and to find ways to overcome the barriers to longer tenancies being offered. (Paragraph 94)

26.  We recommend that the Government convene a working party from all parts of the industry, to examine proposals to speed up the process of evicting during a tenancy tenants who do not pay rent promptly or fail to meet other contractual obligations. The ability to secure eviction more quickly for non payment of rent will encourage landlords to make properties available on longer tenancies. The Government should also set out a quicker means for landlords to gain possession if they can provide proof that they intend to sell the property. (Paragraph 97)

27.  Some landlords are not able to offer longer tenancies because they are prevented from doing so by conditions in their mortgage. We are pleased that lenders are considering how such conditions can be removed, and that Nationwide Building Society is to begin allowing its borrowers to offer longer term contracts. We urge the Council of Mortgage Lenders to work with other lenders to ensure that they quickly follow suit. Lenders should only include restrictions on tenancy length in mortgage conditions if there is a clear and transparent reason. (Paragraph 100)

28.  We recommend that the Government include in the code of conduct for letting agents a requirement both to make tenants aware of the full range of tenancy options available, and, where appropriate, to broker discussions about tenancy length between landlords and tenants. (Paragraph 102)

‘Retaliatory eviction’

29.  There is a perception amongst some tenants that if they speak out it could result in their losing their home. Tenants should be able to make requests or complain without fear that doing so will lead the landlord to seek possession. We are not convinced, however, that a legislative approach is the best or even an effective solution. Changing the law to limit the issuing of section 21 notices might be counter-productive and stunt the market. Rather, if we move towards a culture where longer tenancies become the norm, tenants will have greater security and also more confidence to ask for improvements and maintenance and, when necessary, to complain about their landlord. Moreover, if local authorities take a more proactive approach to enforcement, they will be able to address problems as they occur rather than waiting for tenants to report them. (Paragraph 105)

Rents and affordability

30.  Problems with the affordability of rents are particularly acute in London and the South East. Although in other parts of the country average rents and yields are relatively stable, we are still concerned that some families are struggling to meet the costs of their rent. We do not, however, support rent control which would serve only to reduce investment in the sector at a time when it is most needed. We agree that the most effective way to make rents more affordable would be to increase supply, particularly in those areas where demand is highest. (Paragraph 110)

31.  There is no perfect way to set rent, but, where longer tenancies are being established, linking increases to inflation or average earnings, or voluntarily agreeing a fixed uplift each year merit consideration and could provide tenants and landlords with a degree of stability, though over time mechanisms may emerge as, for example, in the commercial property sector. Tenants’, landlords’ and agents’ groups should encourage their members to discuss these options at the outset of a tenancy. Existing arrangements for setting and increasing rent are often arbitrary and uneven, and reflect the immaturity of the market. (Paragraph 113)

Placement of homeless households in the private rented sector

32.  We welcome the Government’s use of secondary legislation to clarify when accommodation is unsuitable for homeless households. We expect councils to pay full regard to this order and to ensure that homeless households are only placed in suitable accommodation. Given that many of these households will be vulnerable, councils have a particular responsibility to ensure that the properties they are placed in are free from serious health and safety hazards. We recommend that, as a matter of good practice, local authorities should inspect properties before using them for the placement of homeless households. (Paragraph 117)

33.  All agree that, wherever possible, councils should be placing homeless households within their local area (unless there are particular circumstances that mean it is not in the households’ interests). It nevertheless appears inevitable that councils in areas with high rents, London in particular, will place homeless households outside the area, including in coastal towns. Before any placement, there should be a full discussion with the receiving authority and the prospective tenant and information about the household and its ongoing needs should be shared. The Government should consider making this a statutory duty. (Paragraph 121)

34.  We were pleased to hear of positive examples of work to support homeless households in the private rented sector, including the establishment of social letting agencies and the development of private rented sector access schemes. We encourage the Government to work with local government, the charity sector and industry bodies to ensure best practice is shared and lessons learned. (Paragraph 122)

Local housing allowance

35.  We recommend that the Government take immediate steps to allow councils to apply for a variation of broad rental market area boundaries where anomalies occur. (Paragraph 125)

36.  We recommend that the Government conduct a wide-ranging review of local housing allowance (LHA). This review should assess whether there is greater scope for local flexibility over the setting of LHA rates and the boundaries of broad rental market areas. Local authorities could be incentivised to reduce the housing benefit bill by being allowed to retain any savings for investment in affordable housing. (Paragraph 125)

Data quality

37.  We recommend that the Government establish a small task group of key organisations and academics to consider how data relating to the private rented sector can be improved and made more readily available. In addition, we encourage the National Audit Office to contribute to an effective evidence base about the sector and to draw upon our recommendations when developing studies on housing related topics. (Paragraph 128)

Tax

38.  We recommend that the Government, in reviewing the regulation covering the private rented sector, set out proposals for greater co-ordination between the tax authorities and those regulating the private rented sector. (Paragraph 131)

Increasing supply

39.  We welcome the introduction and expansion of the Build to Rent Fund. The Government should take steps to ensure that the fund makes a net addition to new housing, as well as speeding up the delivery of those homes already in the pipeline. (Paragraph 138)

40.  It remains to be seen how much impact the guarantee scheme for the private rented sector will have in delivering additional new homes. The policy may be well-intentioned in its aim to encourage organisations to have more confidence to invest in the sector, but the Government needs to measure results. We invite the Government in its response to our report to update us on the number of applications it has received for the private rented sector guarantee scheme, and to provide an estimate for the number of additional homes it expects the scheme to deliver. If there is any doubt that the scheme is going to deliver the homes required, we recommend that the Government rapidly explore other options for the use of the resources identified. (Paragraph 142)

41.  We welcome the establishment of the task force to promote and broker investment in build-to-let development, and are pleased that the task force is already in operation. It is important that this task force does not become another quango but quickly delivers on its objectives. We invite the Government, in its response, to set out the progress made by the task force in its first few months of operation. This update should quantify the amount of additional investment brokered, and the number of additional homes it would deliver. (Paragraph 144)

42.  Efforts to promote high-quality build-to-let development have commanded significant amounts of government attention and resources. One of the main arguments in favour of this approach is that it will lead to improved choice, quality and affordability across the whole of the private rented sector. It is too early to assess the impact, but a key part of the evaluation of these measures must be the impact they have on the sector as a whole. If, in a year’s time, there is no evidence of this broader effect, the Government must reconsider its strategy and look to other measures to boost supply across the sector as a whole. (Paragraph 148)

43.  There is an urgent need to boost supply across all tenures of housing. We recommend that the Government revisit the Committee’s report on the Financing of New Housing Supply, and set out proposals to implement those recommendations it initially rejected. (Paragraph 150)commons logo


NLA report on the Private Rented Sector Review Landlord News, Latest Articles, NLA - National Landlords Association

Looking at the House of Commons Communities and Local Government Select Committee’s Report on the Private Rented Sector Review, Richard Lambert, Chief Executive Officer of the National Landlords Association (NLA) publicises his comments.

“This is a really positive report. It takes the debate around the growth of the private-rented sector out of the 1970s into the 21st century. The Committee clearly understands how the rental market has developed and what it needs to mature, rejecting the pat responses of rent controls, increased tenure and simplistic solutions of importing ideas from other countries.”

“Landlords must respond to the changing needs and demands of renters. The current tenancy legislation is more flexible than many realise, but the Committee is right to highlight that adapting from the accepted norms to use this flexibility will be a challenge requiring “a cultural change and removal of barriers, real and perceived”.

“The NLA endorses the call for better, simpler regulation and for more proactive enforcement from local authorities which targets those who fail to meet acceptable standards.”

“The NLA also supports the Committee’s recommendations for a more comprehensive regulatory framework for letting agents, and we are pleased that its proposals reflect our argument that the requirements should mirror those already put in place by many agent representative bodies, such as UKALA.”

“Overall, the Committee has brought forward a package of conclusions, recommendations and proposals which offer a fair balance to all and provide the opportunity for the industry at large to take the initiative”.House of Commons


New NLA Chairman is Carolyn Uphill Landlord News, Latest Articles, NLA - National Landlords Association

The National Landlords Association welcomes the new NLA Chairman, Carolyn Uphill, to the helm of the organisation.

Carolyn, formerly the NLA Deputy Chairman, joined the Board of Directors in July 2011 having worked as a Local Representative in Manchester since 2010.

Carolyn has extensive experience as a successful businesswoman and professional landlord letting student and private residential accommodation in and around Manchester.

Having established her own business in 1978, Carolyn successfully developed the enterprise to become a leading construction equipment manufacturer with a seven figure turnover.

In addition to running the business, which she sold in 2008, Carolyn has served as president of the Stockport Chamber of Commerce and continues to shares her wealth of business experience as a business growth consultant and mentor.

As NLA Chairman, Carolyn is keen to ensure the NLA serves and supports the private-rented sector (PRS) by pushing for continuous improvement of standards, greater recognition of landlords’ contribution to society and the economy as well as more cohesion between the private-rented sector’s representative bodies.

Carolyn takes over from David Salusbury, who is stepping down as NLA Chairman but remaining a Director and continuing as Chairman of my|deposits and the UK Association of Letting Agents (UKALA). David has led the NLA as Chairman since 2003 and has taken the organisation from a modest membership base of around 4,000 as the Small Landlords Association to a national body working with 39,000 landlords, 21,500 of which are full paying members. As part of its expansion, the NLA has grown to offer a wide range of services and represents landlords’ interests to both local and national government.

Carolyn Uphill, NLA Chairman, says “it is a great honour to be NLA Chairman at such an exciting time for the private-rented sector. During David’s time as Chairman the NLA has become an incredibly useful resource for landlords and an organisation respected by government. I look forward to building upon his success, supporting landlords in their journey towards continually improving standards and ensuring our voice is heard by policy makers.”

David Salusbury, NLA Director and outgoing Chairman, says “chairing the NLA and watching it grow and develop in response to the changing housing market over the last ten years has been a privilege. There have been many challenges along the way and there continue to be hurdles, such as landlord licensing and additional regulations, to address. I am confident that under Carolyn’s leadership the NLA will continue to grow and represent the needs of landlords throughout the country. I look forward to watching the NLA adapt to the needs of the evolving private-rented sector over the coming years.”

The change of Chairman coincides with the celebration of the NLA’s 40th Birthday.NLA logo colour


Lights! Camera! Landlord Associations! Guest Articles, Landlord News, Latest Articles, UK Property Forum for Buy to Let Landlords

Nick Tadd and Vanessa warwick of the Property Tribes Forum

Before we became full-time landlords, Nick and I worked in the TV industry … Nick as a cameraman, and myself as a Presenter/Producer/Director.

When we founded Property Tribes in 2009, it seemed good sense to call on our TV production skills to produce video content for landlords.

Our YouTube channel now has over 120 videos on it, and we have over 100 hours of video viewed per month!

We have recently interviewed several landlord associations, so I thought I would compile them here as landlord associations are a great resource and support network for the smaller landlord.

Residential Landlords Association

National Landlords Association

Southern Landlords Association

A bit different to directing Motorhead’s 25th Anniversary Concert at Brixton Academy or interviewing Marilyn Manson …. !!

EDITORS NOTE – just for a bit of fun at Vanessa’s expense 🙂


National Landlords Association Issues IMPORTANT Message to Landlords Latest Articles, NLA - National Landlords Association, UK Property Forum for Buy to Let Landlords

On 14th June 2013 Lord Justice Lloyd delivered his judgement on an appeal from the Wandsworth County Court in the case of Superstrike Ltd vs Marino Rodrigues. Since its publication there has been a lot of discussion on the online property forums and at local NLA meetings about the potential impact that this judgement may have on landlords.

Unfortunately, much of this commentary has not fully understood the facts of the case or the way in which a judge constructs an appeal judgement. There is a distinct need for calm and greater clarity about this case. To this end, the NLA has been in discussion with legal professionals and the officials responsible for tenancy deposit protection (TDP) legislation within the Department for Communities and Local Government (DCLG).

It is important to understand that appeal judges only consider the case presented to them, not a similar set of circumstances, or a variation on a theme. The precedent they set is therefore only applicable to cases subject to the same set of circumstances. This fact is crucial in this instance as the case of Superstrike Ltd vs Rodrigues is not representative of all landlords or private tenancies.

The specifics are as follows:

  • The tenancy (an AST) began in January 2007, before the 6 April introduction of TDP
  • The tenancy persisted, on a statutory period basis, without renewal or changes from January 2008
  • No deposit was ever protected in relation to this tenancy, as it was received prior to this becoming a requirement
  • A Section 21 notice was served in June 2011 to end the periodic tenancy

The Judgement concludes:

  • That a statutory periodic tenancy is a new and distinct tenancy, not a continuation of the tenant’s previous status.
  • The legal position was that the deposit held by the landlord at the end of the fixed term was deemed to have been received in relation to the periodic tenancy in January 2008
  • As it was received in January 2008, after the introduction of TDP, it should have been protected.
  • As the landlord did not comply with Section 213 of the Housing Act 2004, they did not have the right to serve a Section 21. This rules the Section 21 invalid.

What it DOES NOT conclude:

  • The ruling does not apply to any deposits taken after 6 April 2007. i.e. it does not introduce a requirement to re-protect deposits held lawfully in accordance with a TDP scheme’s rules when a tenancy becomes periodic. 
  • The ruling does not look into financial sanctions; this case only focused on whether the landlord’s Section 21 notice was valid.
  • The ruling does not look into the need to provide prescribed information .

What does all of this mean?

  • If you have any tenancies which began pre-6 April 2007 and became periodic after 6 April 2007, for which you hold a deposit which was not protected, you may not be able to issue a Section 21 notice.
  • If you do not have any tenancies which match this description, this judgement should have no impact on you whatsoever. Depending on the TDP scheme used, you may receive correspondence in the near future asking you to confirm the status of tenancies for which the fixed term has ended but a request to unprotect the deposit has not been received.
  • Likewise, in the future you may be asked to let the scheme provider know when tenancies become periodic.

If I have pre-2007 tenancies like this, what should I do?

There is no simple answer to that question. Due to the nature of appeals, only the exact circumstances of the particular case in question are examined. The two ways to mitigate the risk of being caught out by this precedent are:

(1)    Return the deposit. This should remove the risk of a future  Section 21 being deemed invalid and is implied by the judgement. However, Justice Lloyd deliberately reserves judgement on this matter.

(2)    Protect the deposit. Likewise this should show intention to comply with the law and remove the risk. However, given the recent amendment to Section 215 of the Housing Act 2004, this may not be sufficient to avoid sanctions. Only a further legal case could determine this.

There is a third option available to landlords affected, which is not intended to mitigate risk and may not be advisable, but could be a valid course none the less, and that is:

‘wait and see’

It is entirely possible that this case will be taken to the Supreme Court, which could overturn the judgement. The NLA is keen to speak to the landlord in this case and is seeking legal advice to determine what options may be available to challenge the decision.

Furthermore, we are keen to impress upon ministers at DCLG that it has a responsibility to regain control over this legislation and should act swiftly to amend the Housing Act 2004 to remove this uncertainty – in the same way it did in 2011 following the Tiensia case.

We will provide regular updates on this matter as soon as more information is available.

EDITORS NOTES

To join is the discussion about this case please CLICK HERE

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Birmingham City Council – “We support good landlords” Latest Articles, The GOOD Landlords Campaign, UK Property Forum for Buy to Let Landlords

Birmingham City Council - “We support good landlords”Birmingham City Council have sent a strong message to landlords who let in the city – We support good landlords

Senior officers of the city council have been in discussions with the West Midlands Regional Representative  of the National Landlords Association (NLA)  since 2011 when HMO licences were about to come up for renewal but it was not until the NLA proposed a radical new approach to the fee structure that progress was made. Continue reading Birmingham City Council – “We support good landlords”


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