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LATEST LANDLORD NEWS

Landlords say repossession hearings taking up to 30 weeks


Even before the scrapping of Section 21, the Residential Landlords’ Association (RLA) is warning that courts across London are failing to cope with the volume of landlord repossession cases.

A Freedom of Information request by the RLA found that the waiting times from claim to possession – for both Section 21 and Section 8 notices – hit 30 weeks in 2019 for London.

This was up from 23 weeks a year before and provides a warning for landlords and the court system nationally, the RLA said.

The RLA is warning that the situation could get worse once the Government presses ahead with plans to scrap ‘no fault’ evictions, which don’t require lengthy hearings, as there will be more pressure on the courts.

The RLA is calling on the Government to establish a dedicated housing court in order to improve and speed up access to justice for landlords and tenants in the minority of cases where something goes wrong.

John Stewart, policy manager for the RLA, said: “If landlords feel that they might have to wait forever to regain possession of their property where they have good reason, such as tenants committing anti-social behaviour or failing to pay their rent, increasing numbers are going to feel it is not worth the risk of letting the property out in the first place.

“This will just add to the already growing shortage of investment in rented housing which is badly needed to meet a rising demand.

“The RLA was delighted when the Government consulted on its proposal for a housing court a year ago but nothing has happened since.

“It needs to get on and get it set up for the benefit of landlords and tenants alike.”

Evictions specialist Paul Shamplina of Landlord Action said: “These figures show how bad the court system and waiting times are getting at the moment.

“We are seeing delays at Landlord Action on a daily basis by the courts – no judges, lost papers and admin errors being the most common reason for delays. From being involved with the housing court working group, I worry that with no clear investment and the abolition of Section 21, hearings will double on Section 8 cases and there will not be enough judges to service the hearings.”



House prices could fall by 12% if no Brexit deal


House prices in the UK are likely to ‘re-accelerate’ next year – unless a no-deal Brexit causes them to plunge.

A no-deal Brexit would trigger a median drop of some 10% during the course of next year. The fall could be between minus 5.7% and minus 12.3%.

The forecast comes from international bank Edmond De Rothschild.

It is predicting an average rise this year in UK house prices of 0.5% and, if Brexit is achieved with a deal, 1.9% next year.

While the report mentions scenarios in the event of what would happen on October 31, the findings were released only yesterday.

The bank has also modelled various housing market scenarios in other European countries, but is the least certain about prospects in the UK.



Landlords and Rental Market in 2019


Landlords saw both void periods and rents drop at the end of 2019, it's claimed.

Analysis of new tenancies processed through the lettings platform in December found that void periods dropped from 24 to 19 days over the month across England and Wales, below the average for the year of 20 days.

Five out of the eight regions monitored by Goodlord saw rents remain at November levels or dip slightly. The largest monthly decrease was recorded in the north-east, where average rents dropped by 3%. Rents rose by 2% in London on a monthly basis and by 3% in the north-west of England and Wales.

London was the most expensive place to rent, at £1,668 per month, and the north-east was cheapest at £588.

It comes as research by insurer Simply Business, conducted before the General Election, found that a quarter (26%) of UK landlords plan to sell at least one property in 2020, equating to more than half a million homes potentially being put up for sale.

The survey of 800 landlords revealed that 82% of landlords are not planning on buying any more properties this year.

Just one tenth said they would buy another property this year, while a third (35%) also reported a decrease in their rental yield in 2019.

The top reasons landlords gave for wanting to sell are tax increases and Government reforms, such as shifting House in Multiple Occupation (HMO) licensing, which added new stipulations on the minimum size of rooms, as well as the banning of admin fees.

Other reasons that landlords gave for planning to sell included rising rental costs (10%), cashing in on their investment (9%), economic instability (5%) and slowing house price growth (4%).

A third also reported a decrease in their rental yield in 2019, which added to the desire to sell.

The research was conducted in November 2019 so it is unclear whether they might have changed their mind since the election result.



Property agents experiencing a ‘Boris bounce’


NetAnAgent, a comparison website, which allows members of the public to post up their properties and request valuations, says it has seen a quick and definitive upswing since last the election.
Managing director Alex Thorpe said: “Since the election we have seen an 8% jump in listings compared against the same days last year and a 48% increase in the ratio of property that have requested a valuation from an agent through the site.

“We know from past performance that the ratio of vendors’ properties listed on our site that then go to request a valuation is a very good indicator of future market confidence.

“This points to an incredible jump in seller confidence and possibly a far stronger start to 2020 than many have been predicting.”



General Election - Property Market uncertainty


There is huge uncertainty surrounding the property market as it awaits today’s election results and what will happen with Brexit, the RICS has reported.

The November Residential Market Survey revealed a dip in new instructions, putting average stock levels on the books of agents close to record lows at approximately 41 properties per branch.

There is little sign of a pick-up in new listings for the start of 2020, with agents continuing to identify a yearly decline in the level of appraisals.

Respondents also reported a third consecutive slide in new buyer enquiries, with 9% more reporting a decline rather than a rise.

More also reported a fall rather than rise in newly agreed sales during November, although the net balance reading improved from -18% to -8% between October and November.

The RICS said: “Much of the anecdotal commentary suggests that uncertainty surrounding the General Election and Brexit are continuing to stifle activity.”

Despite the low levels of appraisals, there are signs of confidence returning to the market, the RICS claims. The report found that 35% of respondents expect sales to rise rather than fall in a year’s time, the highest reading since February 2018. RICS agents are also confident about activity over the next three months, with 11% more expecting an increase rather than decrease in sales, up from 5% in October.

Simon Rubinsohn, chief economist for the RICS, said: “Confidence is critical to a well-functioning housing market and whatever happens in the General Election today, it is important that the new government provides reassurance both over the stewardship of the economy and the ongoing challenges around Brexit which continues to be highlighted in a disproportionate number of remarks made by respondents to the RICS survey.



Tenants running cannabis farms gave fake names


In Liverpool, four tenants gave false information to letting agents which allowed them to rent private homes, have been found guilty of running large cannabis farms.

The four, who operate across Runcorn and Merseyside, rented a number of houses. They provided false documents and false names to the agents. They subsequently claimed they then sub-let the properties.

The four were Lee Williams, 35; Liam Miller, 24; John McDonough, 21; and Jason McDonough, 50.

At Liverpool Crown Court all four were given prison sentences at of between 18 months and five years and three months, after pleading guilty to conspiracy in the production of cannabis.



Landlords lash both Tory and Labour manifestos


The National Landlords Association (NLA) has hit out at both the Labour and Conservative manifestos.

Its CEO, Richard Lambert said that a Labour government would drive landlords from the market, while a new Tory administration would be on a “hell-bent” path to punishing law-abiding landlords.

Labour wants to introduce an annual ‘MOT’ for landlords, rent controls linked to inflation, and a regulatory regime with fines of up to £100,000.

The Conservatives will, like Labour, abolish ‘no fault’ Section 21 evictions, and introduce ‘lifetime’ rental deposits.

Lambert said: “While the NLA supports any policies that crack down on criminals operating in the private rented sector, the Labour manifesto is too extreme, as well as unrealistic, and will be hugely damaging to housing supply in the UK.

“It begs so many questions: from rent caps to open ended tenancies, how does Labour intend to make these policies work? How will Labour ensure landlords who are already compliant don’t take the full brunt of these changes?

“Will they give housing enforcement the priority and the resources it desperately needs? “Does Labour intend to reform the courts so that if a landlord needs to end a tenancy, it can be done quickly and efficiently?

“Currently, what Labour proposes will force landlords to be more selective about the tenants they take on and will drive many from the market altogether.

“We cannot stress enough that punishing law-abiding landlords who live and work in the PRS will be something the Labour party will come to regret.”

He said of the Tory manifesto: “The Conservatives claim that the changes announced will ‘create a fairer rental market’, but fairer for whom?

“To say that we are disappointed that the Conservatives have pledged to continue with their plan to abolish Section 21 is an understatement. Despite a robust lobbying campaign on behalf of the 2m landlords in the UK, the Conservatives seem hell-bent on continuing to punish hardworking and law-abiding landlords.

“We will reserve judgment on the so-called ‘lifetime deposit’. The Conservatives have yet to confirm what this will look like or how this will work in practice.

“The NLA cannot get behind a manifesto that so badly cripples landlords’ ability to run a functioning letting business.”



No-Deal Brexit could cause 12% house price drop says bank


International bank Edmond de Rothschild issued a forecast that UK house prices next year are likely to fall– unless a no-deal Brexit causes them to plunge.

A no-deal Brexit would trigger a median drop of some 10% during the course of next year. The fall could be between minus 5.7% and minus 12.3%.

It is predicting an average rise this year in UK house prices of 0.5% and, if Brexit is achieved with a deal, 1.9% next year.

While the report is slightly out of date – it mentions scenarios in the event of what would happen on October 31 – the findings were released only yesterday.

The bank has also modelled various housing market scenarios in other European countries, but is the least certain about prospects in the UK.

It is forecasting stablisation in Switzerland, a price slowdown in France, and strong house price rises in Germany.



Portfolio landlord Fergus Wilson convicted of racial abuse


Fergus Wilson, a huge (in more ways than one) portfolio landlord from Kent has been convicted of racially abusing a Slovakian traffic warden for giving him a parking ticket.

Fergus & his wife Judith started building up their huge Kent based property empire in the 1980s worth around £200million. They have made repeated national headlines for the way they have treated tenants.

The latest incident has resulted in Wilson being convicted of a hate crime by Medway Magistrates Court and fined £650 after his verbal attack was caught on the traffic warden’s body camera.

In 2017, in an act of defiance, the buy-to-let property tycoon issued a set of letting criteria for his rental homes in Kent.

The Wilsons' Letting Criteria
• No tenants with children under 18. A child over 18 can be a co-tenant
• Only tenants with a Rent Guarantee
• No single mums or single fathers
• No tenants on Housing Benefit
• No low income workers
• No single adults
• No Zero hours workers
• No plumbers (What?!)
• No battered wives
• No smokers
• No pets
• No fat bastards (I made that one up)



UK property repossessions rising


Buy-to-let and home owner repossessions jumped in the third quarter of 2019.
UK Finance figures show that 1,330 home owner mortgaged properties were taken into possession, up 19% annually, while 800 buy-to-let mortgaged properties were repossessed, up 40%.

UK Finance said these figures were still below levels seen between 2009 and 2014 and were partly due to regulatory changes when it comes to lending.

The trade body said: “Lenders continue to show flexibility to borrowers in financial difficulty and possession is always a last resort.”

Its data showed that arrears remained at historic lows.

The proportion of home owner mortgages in arrears of 2.5% or more fell 9% annually to 71,590.

Within the total, there were 22,300 home owner mortgages with more significant arrears of more than 10%, which was 8% fewer than in the same quarter of 2018.

In the buy-to-let sector, there were 4,550 mortgages in arrears of 2.5% or more, down 5%.

Of these, there were 1,170 buy-to-let mortgages with arrears of more than 10%, down 1% on a year ago



RICS says so-called rental reforms hitting house market


The RICS claims Brexit and the general election are hitting the housing market everywhere.

The RICS also called on the next government to stop tinkering with the private rented sector through “misguided” reforms.

According to RICS estate agency members, new buyer enquiries, sales and new instructions are all down for yet another month. Market appraisals have also dropped again.

Prices are flat, and on the lettings side, tenant demand continues to rise as more landlords are forced to leave the sector.

The RICS report said that enquiries from new applicants fell for the second month running in October right across the UK.

Sales also dipped everywhere, other than in Northern Ireland where agents noted a marginal increase.

New instructions were down for the fourth consecutive month across the whole of the UK. In addition, agents reported a decline in the number of market appraisals.

On the lettings side, agents reported a drop in new instructions from landlords, and said that the pace of decline is gathering momentum. RICS agents expect to see more rent rises.

Simon Rubinsohn, RICS chief economist, said: “Both buyer and seller activity remains in a holding pattern, hampered by political and economic uncertainty. Given the upcoming general election next month, it appears unlikely that these trends will pick up to any meaningful extent over the remainder of this year. The picture remains very different on the lettings side, however, with tenant demand gathering momentum over recent months. This is running against an increasingly tight supply backdrop for rental properties and seems set to squeeze the pace of rental growth higher going forward.”



Government has no plans to introduce national register of landlords


The Government has stated that it has no plans to introduce a national register of private landlords. By the way, note that favourite politician’s phrase “we have no plans”.

It has not even undertaken an assessment of the proposal, made in a report back in January when the Chartered Institutes of Housing and of Environmental Health jointly called for a register.

The two organisations said that such a register would make it easier for local councils to identify landlords in their areas and would reduce the need for new licensing schemes.

However, in response to a parliamentary question, Viscount Younger of Leckie on behalf of the Government said that the Government has no current plans for a register, which could place an “additional regulatory burden” on them.

He said that local authorities currently have a wide range of powers available to them, including access to a database of rogue agents and landlords.

ARLA Propertymark called for local authorities to adopt a collaborative approach with landlords and agents, and in strong language said that licensing schemes are not the answer, ARLA chief executive David Cox said: “Licensing does not work. Licensing has never worked and never will work.

“Newham have done 1,200 prosecutions, or 240 a year, out of 47,000 properties. That is 0.5% of properties in their area that they have done anything about and have done prosecutions. I would note that that is with 140 officers. What we need is education. Landlords need to be trained in what they need to do. Agents need to be trained in what they need to do.

Filling in a piece of paper and giving it to the council and paying £500 is not going to teach them the 150 laws that they need to understand.”



Tenants stealing more electricity to power cannabis farms


Theft of electricity by criminals using rental properties for cannabis production is soaring.

Overall cases of electricity theft where there are police investigations are projected to be 13% higher this year than last, with an expected 2,200 cases.

In 23% of cases of electricity theft, police suspect it was stolen for the cultivation of illegal drugs.

Insurers say that claims from landlords whose properties have been converted into illegal cannabis farms now account for a third of the total value of all malicious damage claims.

A leading insurance firm said that cannabis production in rental properties can easily cause thousands of pounds worth of damage, including mould and water leakage. The insurer is warning of signs, including where tenants wish to pay up-front for the lease.



Labour confused over stupid right to buy policy


The Labour Party says it will bring in ‘right to buy’ for private tenants – but that it will restrict the policy to larger landlords.

Shadow chancellor John McDonnell was asked by The Times about its controversial policy, saying it had raised concerns that landlords would be forced to sell off their properties at below market rates.

The Times said that McDonnell has now decided that the policy should not apply to those who only own “one or two” rental properties.

He told the paper: “There’s a large number of individuals or families who have bought another property as their asset for the future and we wouldn’t want to endanger that.” However, critics said that Labour’s amended right to buy policy would still seriously harm the sector.

David Alexander, of property management firm Apropos by DJ Alexander, said: “The shift appears to be aimed at placating individuals and families with smaller property investments and focusing on large scale investors.” “However, the policy of buying anyone’s property at a price decided by government rather than market value would instantly destabilise the whole housing market.”



£4 million to help councils combat criminal landlords


The Government has announced almost £4 million extra funding for councils to crack down on criminal landlords.

Almost £4m is being made available to councils which can put in their bids. The new funding comes on top of last year’s £2m programme which was shared among 56 projects.

For example, Burnley used £60,000 to carry out inspections of rented homes.

After his mum agreed he could speak, Housing Secretary Robert Jenrick said: “It’s unacceptable that a small minority of unscrupulous landlords appear to be breaking the law and providing homes which fall short of the standards that tenants rightly expect. Everyone deserves to live in a home that is safe and secure, and the funding announced today will help to further strengthen councils’ powers to crack down on criminal landlords and drive up standards in the private rented sector.”

Councils have less than a month to apply for a share of the pot, with the deadline for applications on December 1st.

David Smith, policy director of the Residential Landlords Association (RLA), said: “We welcome the Government’s focus on rooting out criminal landlords. For too long the debate has been driven by ideological calls for more regulation of the sector.” He concluded “What is needed is better enforcement of the powers already available to root out the minority who bring the sector into disrepute.”



Tenants making fortune out of illegal sub-letting


Tonight, Monday 28th October at 7.30pm, BBC Inside Out (London) will highlight the growing number of people making a business out of their tenancy via Airbnb, without their landlords’ permission. The show covers the story of a landlord who ended up £10,000 out of pocket after his tenants ‘professionally’ sublet his property in Bloomsbury on Airbnb.

This is a growing problem, particularly in Central London and is partly a result of how too tenant-friendly the law has become. Contrary to the nonsense talked by Shelter etc , it is incredibly hard for landlords to evict even criminals who are illegally sub-letting.

The tenants had a 22-month AST arranged through Base Property Specialists ltd. During a periodic inspection, consented to by the tenants, the agent arrived early to witness the tenants checking a family into the property. On returning to the office, the agent reviewed Airbnb to find the property listed both as a single dwelling and as two separate bedroom rooms. Airbnb had more than 70 booking reviews for the property, with the first being the same month that the tenants’ tenancy commenced, showing they had been subletting it from the beginning.

Despite the tenants requesting to stay and subsequently removing the key safe and repairing the damage, Base Property continued to receive reports from neighbours of people coming and going. When the agent arranged for a plumber to fix a maintenance issue, he was told by the occupants, a Russian family, that they did not speak English and were renting the property.

By this point, the tenants were refusing to engage with the agent.  They continued to host on Airbnb despite denying it, even using a professional laundry service to prepare the beds.  They refused access to contractors who were due to fix a leak, causing further damage to the property. Kristjan Byfield called in the help of Paul Shamplina of Landlord Action who served the tenants with a Section 8 notice and thereafter, the Landlord Action solicitors issued possession proceedings.



Rise in mortgage applications


High street banks approved 43,276 mortgages for house purchase last month – 13.5% up on September last year.

Altogether there were 85,880 mortgages approved by the main high street banks last month. Remortgage approvals were 23.4% higher than in September 2018.

However, trade body UK Finance noted that September last year was a particularly subdued month for the mortgage market.

The organisation also noted that credit card spending, at £11bn, was just over 10% higher than in September last year, but said that repayments were in line with the increase.



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