Year: 2020

A third of landlords are planning to buy additional buy-to-let properties in rural and coastal areas and believe that city centres ‘no longer represent a worthwhile investment’.

This has been revealed by a new poll, which also claims that the ongoing lockdowns have pushed up renter demand in greener towns and villages.

Recent figures from Rightmove have shown that property searches have doubled for homes in small towns and villages with populations less than 11,000.

Researchers from insurance firm Simply Business also found that the Chancellor’s stamp duty holiday for properties for sale under £500,000 has increased the number of landlords buying properties overall three-fold.

Stamp duty boost

Ten percent of landlords now say they plan to buy or have purchased a property this year, up from 3% before Covid struck.

And only 5% of landlords said that they were planning to reduce their portfolio, suggesting that landlord resilience remains strong.

This is despite the recent tax changes, an increase in the number of licensing schemes around the UK and the ongoing restrictions on how and when landlords can evict tenants with rent arrears.

“The coronavirus outbreak and consequent lockdowns have been transformational in UK renters’ attitudes towards property, and therefore where landlords are looking to make their next investment,” says Alan Thomas, UK CEO of Simply Business.

“What is clear though, is that the UK buy-to-let market is going through somewhat of a transition, driven by a move away from the previous demand for city centre properties.”

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A new report into the private rented sector in the North of England has panned national and local government efforts to clamp down on ‘rogue landlords’ and called for greater efforts by authorities to ensure the majority of ‘good’ landlords maintain their properties adequately.

“A focus on rogue landlords ignores poor practice and a lack of resilience in the private sector more broadly,” it says.

Many tenants quizzed in the study said their landlords were ‘reasonable and non-exploitative’ and that problems came from a lack of inertia and awareness rather than malice.

Called ‘Lockdown, Rundown, Breakdown’ and backed by a foundation financed by the Nationwide building society and published by the Northern Housing Consortium, it says the problems with housing quality are more acute in the North because of its stock of pre-war, low-value properties.

Covid problems

Based on tenant interview by Huddersfield University researchers, it says: “Many longstanding repair and quality issues were described as worsening throughout lockdown because social distancing measures prohibited contractors from entering the home.

“It was only in extreme cases, such as the breakdown of heating systems, that contractors typically carried out work.”

But the key issue identified is that tenants are under-reporting repairs and maintenance issues because they feel insecure in their tenancies.

“The research points to a need for policy makers to campaign for the reintroduction of the ban on evictions and the need for all organisations to adopt fair-minded and just debt enforcement and debt recovery practices,” the report says.

“It also further supports calls to provide all renters with security of tenure as a necessary step to ensure that renters have confidence to exercise their tenancy rights around repairs and maintenance – this should be a legislative priority.”

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A criminal landlord has been handed a suspended jail sentence after a tenant died in a house fire at his sub-standard HMO.

Tenant Evaldas Grisciukas died in the fire which started in his first-floor bedroom on Hitchin Road in Luton on 27th March last year, despite two other tenants attempting to save him. One was badly burnt and suffered smoke inhalation.

The court heard that seven people were living in the house at the time of the fire; it had no fire doors and some fire detection that wasn’t linked between rooms and might not even have been working.

Landlord Bhagwent Sagoo, of Old Bedford Road, Luton, admitted failing to take general fire precautions, putting tenants at risk of death or serious injury.

He accepted that he was the manager of the property but said he believed it had been let as a single tenancy.

The judge ruled that he ought to have known who was in the house and would have done, if he had carried out regular inspections. Sagoo was jailed for four months, suspended for 12 months, and fined £20,000 with £12,000 costs.

Luton Councillor Tom Shaw (below), portfolio holder for housing, says: “We are committed to keeping residents safe and inadequate fire safety in a HMO just isn’t acceptable. We expect landlords to put the safety of their tenants first and are pleased to see this sentencing handed down.

“We will continue to work towards ensuring landlords keep their properties in good condition and adhere to safety regulations, or face prosecution.”

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The Green Homes Grant is proving a hit with landlords with just under half saying they plan to take up the government’s £5,000 cash offer, according to research by lender Paragon.

But it says landlords need to get their skates on; there are only 650,000 vouchers available to home owners whether they are landlords or not, and the vouchers must be redeemed and the work completed by 31st March next year.

The popularity of the grant among landlords is not surprising – the Covid-related scheme, which is designed to both generate economic activity and help the government reach its green targets, coincides with the new Mandatory Energy Efficiency Standards (MEES) that went live on April 1st this year.

Change of tenancy
These now prevent landlords letting properties with an EPC rating of F or G even where there has been no change of tenancy, and they must now improve the property rating to E or register an exemption if they want to continue to let it.

The Green Homes Grant therefore helps landlords bypass a major stumbling block that dogged previous efforts to encourage landlords to upgrade their properties; cost.

That’s because the MEES funding rules prior to Covid capped a landlord’s spend at £3,500 and, if a property could not be brought up to an E rating at that price, then an exemption could be applied for.

The Green Homes Grant pays two-thirds of the cost of improving a property up to £5,000, with the landlords paying the rest.

Richard Rowntree, MD for mortgages at Paragon, says: “Doing this, with the help of government subsidy, benefits the landlords themselves, their tenants and the environment, so it’s a sensible move.”

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Private landlords in England will be required to install a carbon monoxide alarm in any room that has a fixed combustion appliance, such as a gas boiler or wood burner, under proposals unveiled in a new Government consultation.

Under the plans, which exclude gas cookers, landlords will also be required to ensure each prescribed alarm is in proper working order on the first day of every new tenancy, and repair or replace alarms if they are reported as faulty during the tenancy.

Landlords in England are already required to have a carbon monoxide alarm in any room that contains a solid fuel burning appliance, such as a coal fire or wood burning stove.

This has been a legal requirement since 1st October 2015, when the Smoke and Carbon Monoxide Alarm (England) Regulations came into force, and failure to comply with this can lead to a civil penalty of up to £5000 being imposed. Government guidance also encourages landlords to ensure that working carbon monoxide alarms are installed in all rooms with gas appliances.

The NRLA sits on the Government Review of Carbon Monoxide Alarm Requirements Working Group, and the association will be responding to this consultation.

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New Government rules mean that possession orders for arrears will only be enforced in cases where tenants built significant arrears pre-Covid.

Orders for cases which rely on significant arrears built by tenants after March 23 will now be put on ice until after the ‘Christmas truce’ period, which ends on January 11.

The NRLA has campaigned in support of landlords whose tenants had built significant arrears that pre-dated and were unrelated to Covid-19.

But while we welcome the Government’s decision to accept our recommendation and exempt these cases from the current pause on repossessions, we have serious concerns that the new rules will mean tenants can now build almost 18 months of rent arrears without any sanction.

What do the new rules say?

Under the new plans, possession orders by the courts related to rent arrears can only be enforced where the arrears amount to nine months or more of rent built before 23rd March. This will remain the case until 11th January 2021.

However the NRLA is concerned this does nothing to address housing debt accrued since the beginning of the pandemic and believes the Government has missed a golden opportunity to help those tenants in financial difficulty due to Covid-19.

The association is continuing to lobby Ministers for a comprehensive financial package that will allow tenants struggling as a result of the pandemic to continue to pay their rent.

‘Short-term fix’

Ben Beadle, NRLA Chief Executive said: “In trying to arrive at a compromise the Government has failed to help those in genuine need whilst rewarding those whose arrears have nothing to do with the pandemic, and in some cases are wilfully not paying their rent.

“This is doing nothing to help those tenants who are trying to do the right thing and seeking to pay off their debts.

“Instead of prolonging the problem with short-term fixes, the Government needs to urgently bring in a financial package to enable tenants to pay off rent arrears.”

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A Conservative MP’s bid to ensure pets are allowed in private rental accommodation reaches its next stage in the New Year.

Andrew Rosindell, MP for Romford, has introduced a Private Member’s Bill that would strictly reduce the right of landlords or their agents to include ‘no pets’ policies for their properties.

The Bill promoted by Rosindell, a former shadow minister for animal welfare, has the backing of animal organisations including the RSPCA and Battersea Dogs & Cats Home.

It’s now been agreed that its Second Reading will be on January 29. This is a stage where MPs debate the main principles of the Bill – not necessarily the fine details.

Rosindell says he is recognising the concerns of landlords by insisting renters demonstrate they are “responsible owners” with a suggested checklist including a vet’s confirmation that their pet is vaccinated and spayed or neutered, free of parasites and responsive to basic training commands in the case of dogs.

In cases where the renter proves they are a “responsible owner”, and the accommodation is suitable for their pet, the right to take a pet into rented property would be assumed.

In his First Reading introduction to the Bill in the Commons last month, Rosindell said: “Dogs are more than man’s best friend, they are equal members of the family and, for most people, being separated from your dog is really no different than being separated from your brother or sister.

“But sadly, every year pet owners who move into rented accommodation are faced with the reality that their family could be torn apart because most landlords in Britain have unnecessary bans or restrictions on pet ownership.

“And for those people who depend on the companionship of their dog and who need that loving friend to be with them, especially those who live alone, such restrictions are nothing less than discrimination, cruel to both the owner and the animal alike.”

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The number of tenants experiencing rent increases fell by almost a fifth in the year to the end of September according to ARLA Propertymark’s latest market snapshot.

Some 40 per cent of agents witnessed landlords increasing rent in September – the latest data available – compared to 48 per cent in August.

This is also 18 per cent lower than in September 2019, when the figure stood at 58 per cent – ARLA says this shows landlords are providing much needed support for tenants during the pandemic.

The number of new prospective tenants also fell for the first time in September since the housing market reopened after the spring lockdown in May.

The average letting agent branch registered 82 new tenants in September, a decrease from 101 in August.

The number of new tenants per branch in September is the lowest since February this year, when there were also 82 tenants registered ahead of the market temporarily closing due to the Covid-19 pandemic.

Meanwhile the number of rental properties available per letting agent branch fell from 208 in August to 193 in September. Year-on-year this is the same figure as in September 2019.

The number of landlords selling their buy to let units rose from four per branch in August, to five in September.

Year-on-year this is the highest figure on record for the month of September with the previous record sitting at four in both 2018 and 2019.

“Our latest figures show that letting agents are continuing to support landlords and their tenants during the ongoing pandemic with rent increases down by almost a fifth year on year and renters staying in their tenancies for longer” explains Angela Davey, ARLA Propertymark’s new president.

“As we head towards winter and further uncertainty due to increasing lock down measures, it is vital that tenancies are maintained. To this end, with the furlough scheme finishing … Westminster must follow the Scottish and Welsh authorities in providing a package of support to tenants to keep the rent flowing” she adds.

“This is absolutely vital in keeping people with Covid-related arrears in their homes and ensuring that landlords continue to have funds to make mortgage payments.”

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The long-running uncertainty over Brexit may lead to a glut of British expats returning home and renting rather than buying.

That’s the view of Girlings Retirement Rentals, which says uncertainty surrounding any Brexit deal – if one is struck at all – means many expats may return sooner than expected in a bid to avoid any difficulties.

It’s estimated that of the 1.3m Britons living in other European countries, around 20 per cent are retired.

Jamie Turnbull, business director at Girlings, says: “Many expats face an uncertain future. On top of all the challenges regarding Covid-19 this year, they face the issue of what to do regarding where they live after the Brexit transition period ends. For those that opt to come back to the UK they can be worried about where they will live.

“One option is to rent in a retirement development. We have quite a few expats already living in our developments who have come back to the UK after years living abroad.”

Girlings deals exclusively with renting private retirement property to the 55-plus market throughout the UK.

It has over 2,500 properties in 600 developments, and lets the majority of its units on life long assured tenancy agreements, which allow tenants to stay in properties for as long as they wish.

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