Author: antonyantoniou

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Under-resourced county courts are struggling to cope with the number of possession claims being put forward, ‘causing misery for landlords’

January will be ‘real test of consumer sentiment’ as UK prepares to leave the EU

There are tentative signs that landlords are beginning to return to the buy-to-let market, particularly in London where house price falls and steady rental growth are gradually enticing investors back, according to Knight Frank.

The company reports that during the first 11 months of 2019, landlords acquired 11% of homes sold in Great Britain, the same level as 2018. But in November alone, the proportion of homes bought by investors increased to 12%.

London recorded a bigger rise in landlord purchases. Landlords purchased 13% of homes sold in the capital during the first 11 months of 2019, up from 11% during the same period of 2018. This was the first rise since 2015 but is in part due to fewer owner-occupiers transacting in the market. But will this trend continue?

The latest UK Finance mortgage data published this week suggests that property purchase and remortgage approvals in November held up relatively well given that the country was in full general election mode.

Andrew Montlake, managing director of the UK-wide mortgage broker, Coreco, said: “For a lot of British households, November was a classic case of better the devil you know.

“They chose to get their houses in order and secure a mortgage before a potentially disruptive election result.

“In the week following the general election result we saw a slight uplift in enquiries but the buyer spirit was largely trumped by the Christmas spirit.

“January will be the real test of consumer sentiment as we approach our departure from the EU.

“There is still much uncertainty as to the intricacies of how we leave the EU, but people at least now know it’s coming and that creates confidence.”

The figures also reveal that there were 16,200 remortgages in the buy-to-let sector in October, 2.4% fewer than the same month in 2018.

Montlake added: “While we are expecting an uplift in transactions and remortgages, it would be premature to assume that 2020 will be a boom year for the property and mortgage markets.

“As negotiations with Brussels unfold there is still the potential for volatility.”

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Court delays causing ‘extreme stress’ for landlords

Court delays causing ‘extreme stress’ for landlords

Under-resourced county courts are struggling to cope with the number of possession claims being put forward, ‘causing misery for landlords’ not to mention costly delays, according to Landlord Action.

The vast majority of residential possession claims are dealt with in the county courts and enforced by county court bailiffs. But government spending cuts, an increasing number of possession cases, court delays and administrative errors mean evictions are taking longer than ever, pushing many landlords into debt.

In a recent Section 21 case handled by Landlord Action, a tenant claimed she did not receive the ‘How to Rent Guide’ so the court set a hearing date of 27th June 2019. But the court postponed the hearing with just 24 hours notice because the Judge was no longer available.

Several hearing dates have since been set and cancelled, leaving Landlord Action with little choice but to chase for a new date some 12 months after the original Section 21 notice was served back in January 2019, and the landlord no closer to gaining possession.

“We are experiencing cases like this time and time again” said Paul Shamplina. “It’s not only causing extra work for us at Landlord Action, meaning we now have a full-time member of staff whose main responsibility is chasing courts for updates on possession orders, Notice of Issues and bailiff appointments, it is also causing extreme stress for the landlords who are already facing financial hardship as a result of rent arrears.”

Landlord Action is now calling on the government to increase investment in the court system before pressing ahead with plans to scrap Section 21 of the Housing Act, as part of the new Renters’ Reform Bill.

Shamplina continued: “The situation is the worst I have experienced in my 28 years in this industry.  Cases are being overlooked, delayed or thrown out due to administrative errors and there is little we can do to improve matters for landlords when we are at the mercy of the courts.

“Remember, many courts were closed due to cost saving by the Ministry of Justice (MOJ).”

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Rogue landlord fined £27k for unsafe HMO

Rogue landlord fined £27k for unsafe HMO An unscrupulous landlord has been fined £27,000 over an unlicensed HMO in Luton with multiple fire and safety breaches. ​

Luton Magistrates Court heard that the unlicensed property at 14 Kenneth Road, Luton, LU2, had poor fire alarm systems and blocked fire exits, missing and broken tiles on the roof, and evidence of rat infestation.

Marco Caruso of Verulam Court, Hendon, pleaded guilty to illegally managing a HMO and seven breaches of HMO regulation.

He was fined £27,000, which included a £170 victim surcharge and costs of £848.70.

Cllr Tom Shaw, portfolio holder for housing, commented: “This is a great result for the rogue landlord project [being operated by the council] and an excellent example of how we are working together to ensure that private housing in Luton is of a good standard.

“If an HMO is poorly managed, the tenant’s safety could be at risk.

“We are committed to identifying rogue landlords and making sure the properties they manage are in a good condition and adhere to safety regulations, or face prosecution.”

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Help and support available for landlords paying tax and keeping records

Help and support available for landlords paying tax and keeping records The tax return deadline when filing your online Self Assessment for the tax year ending 5 April 2019 is less than a month away.

Filing an annual tax return is a necessary task for every self-employed person, including buy-to-let landlords, with the 31 January deadline for the 2018/19 Self Assessment tax return at midnight on 31 January 2020.

Whether you have just started out as a buy-to-let landlord or you are an established property investor, there is much to consider from a financial point of view.

Around 10 million people must complete a self-assessment tax form every year, typically because they are self-employed, run their own business or have untaxed income or capital gains, such as from a buy-to-let property, a trust or investment portfolio.

There is no need to fret over filing your tax returns, as it does not even require an accountant.

However, if you are concerned about going it alone and doing your own tax return, you may wish to check out HMRC’s ‘help and support for landlords’.

For more information, click here.

HMRC also offers online tax return help for landlords to their online series of help and support webinars.

View all HMRC webinars.

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New trade body launches for BTL landlords

New trade body launches for BTL landlords A new landlord organisation, which is the largest ever trade body in the letting sector, has been officially launched.

The National Residential Landlords Association, which came into force yesterday, has a membership of more than 80,000 landlords.

The new organisation has come about after the National Landlords Association (NLA) and the Residential Landlords Association (RLA) agreed to merge in autumn, with a view to delivering a stronger voice for landlords in the private rented sector.

Ben Beadle is the NRLA’s new chief executive, having joined from Touchstone, part of the Places for People housing group. He was previously managing director of TDS Northern Ireland and director of customer service with the TDS.

The two previous chairs, Alan Ward of the RLA and Adrian Jeakings of the NLA, said in a joint statement: “After more than 20 years of friendly competition the time is right to create a single organisation to represent and campaign for landlords.

“With so much of our work done in parallel there are major benefits to be gained for our landlord members.

“We will be stronger together when presenting a unified voice to government both nationally and locally about the importance of supporting the majority of landlords who do a good job providing the homes to rent the country needs.”

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Rightmove reveals the year’s most searched-for locations

Rightmove reveals the year’s most searched-for locations

Bristol is the location outside London most searched for on Rightmove this year, by both buyers and renters.

The average asking price of property in Bristol is £316,410, which is around £283,000 cheaper than in the capital, while homes for sale in Bristol spent an average of 50 days on the market before finding a buyer this year – selling quicker than anywhere else in the South West.

Manchester and Liverpool completed the top three most searched for locations for renters this year, while York and Glasgow were the second and third most popular places for prospective buyers.

In the capital, the most searched for place for buyers was Wimbledon and for renters was Canary Wharf.

When it comes to sales growth, Pontefract in Yorkshire has seen the biggest year-on-year increase in average asking prices, rising 12.3 per cent to £175,412 in 2019.

This compares to a national average of just 0.8 per cent.

In the capital, Hoxton in the London borough of Hackney takes this crown, with average asking prices rising by 11.4 per cent to £1,019,510 this year.

Meanwhile, it’s Ashton-Under-Lyne in the North West which has seen the biggest rental hikes outside of London. Tenants, on average, are forking out £546 a month – a 5.4 per cent upturn from 2018.

And in London, Battersea in Wandsworth has seen the biggest increase in average asking rents, with prices rising by 14.1 per cent over the past year to £2,544 per month.

Time on the market measures show the top 10 ‘fastest’ locations are all in Scotland, with Falkirk leading the way, taking just 28 days from the time a property is added to Rightmove until it is marked as sold subject to contract.

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Section 21 changes: time to prepare for reforms to the eviction system

Section 21 changes: time to prepare for reforms to the eviction systemLetting 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.”

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Man who sublet hundreds of properties to criminal gangs jailed

Man who sublet hundreds of properties to criminal gangs jailed A man who rented hundreds of properties that he sub-let to criminal gangs running brothels and cannabis farms has been jailed for seven years and four months.

Chinese national Feng Xu used several fake identities to secure accommodation, according to the National Crime Agency (NCA).

Feng was arrested in Birmingham in May as part of a major investigation into modern slavery and human trafficking.

He had previously admitted 22 fraud, false identity and money laundering offences at Birmingham Crown Court.

The 43-year-old was described by investigarors as a “prolific operator” and an “important enabler” for different criminal networks involved in prostitution, drug production and housing illegal immigrants.

Feng, who ran his network for more than three years at his home in Birmingham, paid out more than £4m in rent.

One computer database listed 446 different addresses that Feng had been involved in renting, investigators said.

Matt Rivers, branch commander at the NCA, commented: “Using numerous false identities and false documentation he was able to supply hundreds of different properties across the UK.

“We believe that taking him out will have caused significant disruption to a number of different organised crime groups involved in sex trafficking and drug production.”

Feng, who has lived in the UK illegally for almost 20 years, will face deportation after serving his sentence.

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Despite tax and regulatory changes ‘there is still money to be made in the PRS’

Despite tax and regulatory changes ‘there is still money to be made in the PRS’ With savers receiving poor returns from banks and building societies, thousands of people unsurprisingly continue to turn to residential property as a means of supplementing their income, supported by record-low mortgage borrowing rates, growing demand from renters and stable yields, as buy-to-let consolidates itself as the investment of choice for many investors.

Despite a challenging time for the market, characterised by tax and regulatory changes, investment in buy-to-let continues to outperform most major asset classes, as demand for properties in the private rental sector continues to grow.

David Alexander, joint managing director of apropos by DJ Alexander Ltd, said: “There is still money to be made in the private rented sector and being a landlord can provide a reasonable income and a healthy pension. But landlords need to be more savvy to make it work and much more pro-active than in the past.”

“You must ensure your finances are arranged as efficiently as possible, that your costs are reduced to the minimum, and that your margins are as good as they can be.”

Rents in the UK’s private rented sector are rising, with the latest data from HomeLet revealing that they reached £953 per calendar month (pcm) in October, up 2.7% year-on-year.

All 12 of the regions monitored by HomeLet showed an increase in rental values between October 2018 and the corresponding month this year.

Meanwhile, according to the latest mortgage lending figures, the number of new BTL loans achieved its second highest figure for the year in October 2019 at 6,600 while the value of these loans equalled the highest for the year.

BTL remortgaging was at the second highest level for the year in October 2019 at 6,600 and matched the highest monthly value of the year.

The number of BTL mortgages in arrears has dropped by 5% in the third quarter compared to the same quarter in 2018 and the total number accounts for just 0.23% of all BTL mortgages outstanding.

Alexander continued: “Being a landlord has never been more difficult but like all businesses the best people will understand the need for flexibility and be ready to change to meet the circumstances. It is inevitable that there will be change and you must make your business model to match the market.

“There may be some casualties along the way but BTL remains a profitable and viable investment for those who adapt and thrive in a changing market.”

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“A Rightmove gimmick”: website slams idea of ‘Boxing Day bounce’

“A Rightmove gimmick”: website slams idea of ‘Boxing Day bounce’

A website has slammed the idea that there is a surge of interest in buying homes on Boxing Day, describing the perception as “a Rightmove marketing gimmick.”

Agency comparison service GetAgent says there are widespread myths surrounding the idea of selling homes at Christmas; it says that there may indeed be a surge in the number of people looking at the portals, but it queries whether this actually promotes sales.

Land Registry data on actual sales during December shows that there is a relatively strong market with 79,754 sales registered during the month last year, the sixth highest of all months of the year.

But while GetAgent accepts that December holds its own in terms of sales volumes, the average sold price hit just £289,801, the lowest throughout the year other than just May and February. 

In a statement the site says: “For those relying on the Boxing Day Bounce to boost their home selling chances, it seems to be more of a Rightmove marketing gimmick rather than a property selling silver bullet.

“With the average time to sell currently at 162 days across the UK, going live online on Boxing Day would still see the average home seller wait until the start of June to complete on a sale.”

And it continues: “For those looking for the quickest sale, taking advantage of a quiet period in the industry to get their ducks in a row will see them a step ahead come January, however, it could also see them pushed down the pecking order and for those looking for the best price, it’s better to wait until the festive dust has settled to kick things off.”

GetAgent’s founder and chief executive Colby Short is distinctly unimpressed at the quality of enquiry that festive season portal viewing generates.

“Aunty Tina the tyre kicker, flicking through homes while on her third sherry, probably isn’t in the serious buyer you want to attract. While listing views are great, a large degree of exposure with little interest or enquiry can be disheartening, and opting to burn your home’s initial launch momentum on the wrong audience could actually be detrimental to your sale” says Short.

“Come January a fresh influx of stock will see your property pushed down the rankings, out of sight and out of mind to those with serious intentions of buying” he tells prospective vendors.

“So while the data shows that the Boxing Day Bounce will provide a good chance of transacting come June, you are far better off waiting until it’s business as usual and listing your home at the start of the New Year, in order to achieve a better price come completion time in July or August.”

Short’s analysis is based on transaction and price data sourced from the Land Registry Price Paid data set; and his Time To Sell is based on the time from first listing to under offer/sold subject to contract.