Tag: Buy-to-let

Letting agents are being urged to do more to protect buy-to-let landlords by preparing now for the government’s plans to scrap Section 21 of the Housing Act, as part of a new Renters’ Reform Bill.

PayProp is advising agents to adapt to upcoming changes to the eviction system by updating key documentation and automating arrears management to cut the chances of having to evict tenants and leave landlords with an unnecessary rental void period.

The lettings payment automation provider wants to see letting agents take the following steps.

Neil Cobbold, chief operating officer of the lettings payment automation provider, said: “For some time, the political will – regardless of party – has been to remove Section 21 from the Housing Act 1988 and reform the eviction system.

“Following the Queen’s Speech, letting agents and landlords need to start preparing for change and updating their processes accordingly as it has been confirmed that the evictions process will be reformed through the same Bill.”

Cobbold points out that amendments to the eviction process will see agents needing to update their contract templates and eviction notices to fall in line with a new system – highly likely to revolve around a strengthened Section 8.

He explained: “One of the most important aspects of eviction reform for agents will be educating and informing landlords and tenants about how the new system will work.

“However, on top of this, they will also need to make sure their documents are up-to-date and watertight to evidence their adherence to current and proposed legislation. This will give landlords and tenants the best chance of a smooth eviction process.”

“Agents who adopt thorough record-keeping and arrears management can prove their worth to landlords and increase their chances of new business and client retention.

“Having the right technology and systems in place can be a huge help in making these changes seamless and efficient.”

He says that the removal of Section 21 has the potential to impact the methods landlords use to regain possession of their properties, although he feels that the government’s acknowledgment that it needs to improve the court process was a welcome addition to the Queen’s Speech.

But reforming the grounds for possession has the potential for teething problems and agents could mitigate this by improving their own internal procedures.

Cobbold continued: “With this in mind, agents need to think about the ways they can help to reduce the frequency of evictions. Encouraging good relationships between landlords and tenants is all-important, as is staying on top of repairs and facilitating good communication between both parties.

“Rent arrears are one of the most common reasons for evictions, so agents can help landlords to keep them to a minimum by sending automated emails and text messages – which are proven to be more effective when it comes to chasing rent payments.”

The Christmas season is upon us and there is a good chance that your tenants may be going away, leaving your property empty and therefore vulnerable.

To help ensure that your property remains protected, there are a number of measures that you and your tenants could take to keep your property safe while the occupants are away.

As the landlord, you should advise their tenants to check the functionality of locks, not only on main doors and windows, but also on sheds and garages, as bikes are often the number one choice for festive felons.

Tenants should also be told to ensure that valuables are kept out of sight so that they are not actively advertising the property to burglars.

You or your tenants may wish to consider installing timers for lights and lamps so that it looks like someone is at home.

It may also be wise to ask your tenants if you or a representative can enter the property if their plan to be away for an extended period. That way, post can be taken in, curtains can be opened and closed, and a vehicle can be seen to be at the property.

To help alleviate any concerns you may have over the festive period, here are some tips that you may care to share with your tenants:

+ Keep valuables out of sight: Keep valuables out of sight such as laptops, televisions and car keys might just prove to be an incentive to an opportunist.

+ Lock all windows and doors: If you are sharing a house or a flat, make sure that the last person to leave does a quick check around the property to ensure that all windows and doors are locked.

+ Keep a light on: A cheap plug-in timer will turn lamps on and give the impression that somebody is home when your property is empty over the holiday.

+ Take down Christmas decorations: While it may make your house look a little cheerier, if your house is going to be vacant until after the New Year decorations may indicate to that the house is empty, so take down the decorations before you leave for Christmas.

+ Neighbourhood watch: If you are comfortable and friendly with your neighbours then inform them that you’re going away and how long for, and ask them to keep an eye on your property.

Rents in the PRS continued to grow at a modest pace in November, the latest figures from HomeLet show.

The data reveals that the average rent in the UK hit £947 per calendar month (pcm) in November, up 3.2% year-on-year.

When London is excluded, the average rent in the UK is now £784pcm, while the average rent in the capital is now £1,665pcm.

All 12 of the regions monitored by HomeLet showed an increase in rental values between November 2019 and the corresponding month this year.

But all of the regions monitored by HomeLet saw a slight decrease from October 2019, with the exception of Wales and the North East which saw an increase of 1.1% and 0.4% respectively, and the East Midlands which remains unchanged.

The region with the largest year-on-year increase is Wales, showing a 5.2% rise between November 2018 and November 2019.

Rents look set to rise across much of the UK next year owed in part to a further increase in the number of landlords exiting the buy-to-let market as the impact of legislation continues to be felt, letting agents have predicted,

ARLA Propertymark asked its members to share their predictions for the private rented sector and found that more than four-fifths – 84% – of letting agents think rent prices will rise in 2020, up from 65% when agents were asked the same question last year, looking ahead to 2019.

The research also shows that the supply and demand gap looks set to widen next year, with more than three-fifths – 61% – of agents forecasting that demand will continue to rise, while almost seven in 10 – 68% – think the number of landlords operating in the PRS will decline next year, as they are driven out by rising costs.

In line with this, 68% expect landlords’ taxes to rise again.

David Cox, chief executive, ARLA Propertymark, commented: “For far too long, successive governments of all political persuasions have passed significant amounts of complex legislation for landlords. As a result, much of this year has dampened landlords’ appetites to invest and expand their portfolios, with many consolidating their assets, or choosing to step away from the sector altogether. This has impacted tenants most, who have restricted supply and have been faced with less choice and paying higher rents.

“Looking ahead to 2020, we hope the government recognises the importance of increasing supply for tenants and uses it as an opportunity to make the market more attractive for landlords. This will encourage more landlords back into the market as well as ensure that tenants, including those who are most vulnerable, are not at a disadvantage in being able to find a suitable and affordable home to rent.

“Change should make the PRS fairer for all involved, and not penalise those landlords who provide high quality, affordable housing for thousands of tenants.”

The UK could be heading for a rental crisis, with experts dreading the prospect of a chronic property shortage in the PRS as more than a third of private landlords look to sell up in the next year in the face of lower profits, new research shows.

A wide-ranging study of 2,000 landlords by the Residential Landlords Association’s (RLA) research exchange, PEARL, has found that almost 34% of private landlords are looking to sell at least one property over the next 12 months.

The study also found that just 12% of landlords are looking to expand the number of homes they rent out, down from 14% a year ago.

Almost half of landlords – 45% – told the RLA that the 3% stamp duty surcharge on additional properties had been a deterrent to further investment in property.

The drop in housing supply comes at a time when the Royal Institution for Chartered Surveyors (RICS) is warning that the demand for private rented homes is on the up.

The RLA is now calling on the government to scrap the stamp duty levy where landlords provide homes adding to the net supply of housing.

This should include developing new build properties, bringing empty homes back into use and converting larger properties into smaller, more affordable units of accommodation.

David Smith, policy director for the RLA, commented: “This is yet more clear evidence of the sell-off of private rented housing largely due to the government’s extra tax on new rental homes.

“It is ridiculous that when the country needs all the extra housing it can get, it penalises good landlords who invest in new homes.

“With a new government and a Budget due, we need a shift in policy to one that supports investment because otherwise there will be a growing supply crisis in the private rented sector as demand continues to rise.”

A rogue landlord in Doncaster has been given a banning order for two-and-a-half years after repeatedly putting tenants’ lives at risk by providing unsafe housing.

Almas Rashid, 39, was banned by The Property Tribunal Service from letting any residential property in England and engaging in letting agency work or property management work for a period of two years and six months.

Doncaster Council took action against Rashid, of Thorne Road, Wheatley Hills, DN2, following a string of prosecutions earlier this year for breaching regulations, failing to comply with improvement notices and not obtaining a houses in multiple occupation (HMO) licence.

Rashid pleaded guilty to seven offences under the Housing Act 2004 and was ordered to pay £2,800 in total.

In addition, he also had to pay costs of £2,579.73 and a £40 victim surcharge.

Rashid’s ban will come into play from 14 February 2019, and if he breaches the banning order, penalties can include imprisonment for up to 51 weeks or a court fine – or both – or a civil financial penalty of up to £30,000.

The banning order is believed to be the first in the north of England and only the third achieved by a council since new legislation was introduced in April 2018.

Cllr Chris McGuinness, cabinet member for communities, the voluntary sector and environment, commented: “The granting of this banning order sends out a clear message to all rogue landlords that our housing enforcement team is at the cutting edge of enforcement.

“When tenants are put at risk through the actions or lack of action by a landlord, we will clamp down by using all the enforcement tools at our disposal.”

Cllr Glyn Jones, deputy mayor and cabinet member for housing and equalities, added: “We will take tough action against landlords who fail to comply with licensing rules as we are determined to drive up housing standards across the borough and improve health and safety for tenants.

“Good quality, safe housing is important for Doncaster residents and our communities.”

The cost of fixed rate Brexit buy-to-let mortgages are set to fall now the Conservatives have been elected, according to online mortgage broker Property Master.

The monthly cost of fixed rate buy-to-let mortgages have fallen across all categories compared to the same time last December – in some instances by as much as £38 per month for the average mortgage.

But before last week’s Conservative victory this downward trend was stalling.

Angus Stewart, chief executive of Property Master, said: “Now that the uncertainty created by last week’s General Election has ended and as we appear to be moving more swiftly toward Brexit at the end of January, we believe there is every chance rates will fall still further.

“Firstly, the Conservative victory, even before it happened, strengthened the pound so removing one factor that could have encouraged the Bank of England to increase rates.

“Secondly, two members of the Bank’s Monetary Policy Committee voted for lower rates last time around which makes us think downward is more likely to be the next movement in the base rate. The stars are aligned for lower mortgage rates for hard-pressed landlords in the New Year.”